Party Autonomy in International Property Law - Peace Palace Library

5. Party Autonomy in International Property Law: A German Perspective
findings on the content of a foreign law could not be challenged before
the Federal Supreme Court. Nevertheless, the Court of Appeal did not
stop at this point. Instead, it argued that S and B had chosen German law
as the law governing the transfer of ownership between them. Given that
both parties were German companies, the sale contract was governed
by German law, and so on. The Federal Supreme Court did not accept
this derogation from lex rei sitae. The judges rejected party autonomy in
property law by invoking the following arguments. First of all, the general
interest in legal certainty is best served by applying the lex rei sitae. After
all, the transfer of ownership also has implications for third parties, who
need to ascertain easily which law governs rights in property. Second, the
Federal Supreme Court argued that accepting choice of law regarding the
transfer of ownership would violate the principle of a numerus clausus of
property rights. Who knows what kind of rights in property alien to German
substantive law the parties might invent? Third, undermining legal
certainty and stimulating legal creativity in property law would endanger
the protection of creditors. Finally, the Federal Supreme Court pointed
out that lex rei sitae was not only a cherished rule of German customary
law but also an almost universally recognised conflicts principle in other
countries as well. A strict adherence to the lex situs would thus foster
one of the principal goals of classic private international law as developed
by Friedrich Carl von Savigny: namely, the international harmony of
decisions. 15 Accordingly, the Federal Supreme Court remanded the case,
leaving the task of determining and applying Polish property law to the
lower court. The German Government referred to this decision and its
ratio decidendi in its official explanation for the Act of 1999 (Article 43[1]
EGBGB). 16 The Court replicated this favour by later referring to the new
Act as ‘a codification of our settled case law’. 17
b) Formal validity
German private international law is not only strict in applying lex rei sitae
with regard to the substantive requirements to the transfer of ownership; it
also extends this attitude to the formal validity of a legal transaction crea-
15
On the international harmony of decisions as one of the principal goals of the
conflict of laws, see Friedrich Carl von Savigny, A Treatise on the Conflict of
Laws (William Guthrie trans., 1880) 69 et seq.
16
Bundestags-Drucksache 14 / 343 (1999), p. 16.
17
BGH 29.5.2000, IPRspr. 2000 No. 43 (p. 93).
Jan von Hein
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