Where is my Container? The Protection of Container Leasing Companies’ Proprietary Rights

Abstract: Containers are constantly crossing borders, making it almost impossible for a container leasing company to predict which jurisdictions containers on lease may enter – a question, however, of great importance. The protection of the lessor’s proprietary rights is dependent on that countries respect and uphold the protection. Nonetheless does the protection as of today vary widely and it occurs that lessors in the case of, for example, a lessee’s bankruptcy, are forced to bail out their containers from depots, otherwise refusing to give out the containers. The problem partly depends on differences in national legislation, and partly on the fact that the protection, although formally existing, is not upheld in all parts of the world. Without efficient protection financiers may become reluctant to grant credit for movable equipment, in its turn being an obstacle to world trade. Such thoughts lie behind the Cape Town Convention 2001, providing protection for proprietary rights to certain categories of movable equipment by having them registered in an international register. As of today, containers are not comprised under the Convention, although it was discussed during the drafting work. The possibility remains, however, to add further categories of equipment in the future. Such a solution would undeniably strengthen the protection of the proprietary rights and lead to uniform substantive provisions in the area. On the other hand, the capital tied up in container fleets does not lie in the separate objects but rather in the fleet’s quantity, making it less appropriate to adopt an international register for containers in comparison to other types of movable equipment such as aircrafts and ships. To register each and every single container would be costly in comparison to the rather low value of each single container. The container leasing companies, in addition, have developed a number of preventative methods, which as of today seem to be efficient.