Successful Risk Management – Problems
arising from the lack of rolling stock title
security
Martin J Fleetwood – Partner
Secretary, Rail Working Group
Overview
 Can interest be registered?
 Claims by Third Parties
 Recovery at the end of the lease period
 Insolvency of Operators
 Keeping track of rolling stock
Can an interest be registered?
 Rolling stock is designed to move about
– Which country should an asset be registered in?
– Can a charge be registered over a moveable asset?
 What registers are available for recording an interest
in rolling stock?
– Operational Asset Register for a particular system
– Charges register
– A specific county-based asset ownership register
– Asset register under the Luxembourg Rail Protocol
 Will one country recognise a charge registered in
another?
– Conflict of laws
 How can you identify your item of rolling stock
amongst a number of similar vehicles?
Claims by Third Parties
 Sale to third parties
– Bona fide purchaser in good faith
 In “home” country
 Once vehicle is in another country
– Where notice of ownership is apparent e.g. title plate
 Third party creditor’s claim for distress
– Jurisdiction may give priority of claim
– Requirement to apply to court for release of asset
 Administrator of insolvent Operator
– Jurisdiction may give priority of claim
Recovery at end of Lease Period
 Location of rolling stock
– How easy is it to locate the asset?
– Is proof of ownership required to recover if not
redelivered by the Operator?
– Are fees payable for demurrage
 Speed of local courts to assist recovery
– What proof of ownership is required by the court?
– What if there is a counterclaim by a third party?
– What are the likely court/recovery costs
 Loss of rental from being unable to re-lease rolling
stock
Insolvency of the Operator
 Proof of ownership as against the administrator/
liquidator
– Local insolvency regime
– If a fleet is spread over a number of countries will there
be a number of separate proceedings to deal with?
 Ability to recover rolling stock
– Can an Administrator continue to use the asset?
 US Chapter 11 proceedings
– Payments for continued use of rolling stock
 Speed of local courts to deal with claims for return of
rolling stock
– Loss of rental from being unable to re-lease rolling stock
– A number of civil law jurisdictions are more favourable to
the debtor
Keeping Track of Rolling Stock
 Operator’s vehicle identification number
– Often relates to the type of vehicle and can change with
alterations to the vehicle
– Likely to change with a change of Operator
 Record are only as good as the people who keep
them
– Miss-recording the vehicles making up a train
– Identifying where vehicles are crossing borders
 Entering private sidings
– How can you gain access to check that the vehicle is
yours?
 GPS coverage
– Is there coverage for the entire journey?
– How secure is the transponder?