The Danish Aircraft Engine Dispute: The Sequel

On 19 June 2015 the Danish High Court rendered its decision in an aircraft engine dispute arising out of the bankruptcy of the Danish airline Cimber Sterling. The main issue of the dispute was whether the bankruptcy estate had gained title to nine aircraft engines leased to the airline and placed on the airline's aircraft. The resolution of the issue was contingent on a construction of Article XVI of the Geneva Convention on the international recognition of rights in aircraft. In a characteristically short deliberation, the High Court found that the said Article XVI provides a modified principle of accession to the effect that the bankruptcy estate gained title to such engines that were not merely temporarily installed on the bankrupt airline's aircraft. Nothing surprising in that respect. What is quite remarkable is how the High Court determines when an engine is not merely temporarily installed and in so determining, fully disregards the engine lessor's and the airline's intentions and legal relationship. The result; the engine lessors lost title to seven out of nine aircraft engines. This article provides a brief overview of the case and a critical analysis of the High Court's judgment with an emphasis on its potential effect on Danish aviation and the construction of Article XVI of the Geneva Convention going forward.