Party Autonomy in International Property Law - Peace Palace Library

B. Private International (Property) Law
amended in order to provide for a remedy to the deficiencies in legal practice
in French or Belgian law. It is, to a certain extent, an inappropriate
use of PIL, as PIL is not meant to fill the gaps left by substantive property
law. We will give two examples below, one with regard to transfer of
ownership for security purposes and the other with regard to recognition
of the trust.
6.4.2.1. Assignment of property for security purposes
The possible interaction between substantive property law and private
international law is visible in the field of the fiduciary transfer of ownership
for security purposes. The developments of commercial transactions,
which result in gradually increasing cross-border transactions,
have necessitated the introduction of a more modern security instrument.
45 This has led the legislator to introduce the fiduciary transfer in
the framework of banking operations. This was the Loi Dailly, which
is dealt with supra. Hence, there was no need in French private law
to accommodate PIL rules with regard to the transfer of ownership for
security purposes.
PIL was subject to an analogous development as substantive law. In a
judgment of 24 May 1933, the French Supreme Court refused to give effect
to a transfer of goods for security purposes by a French transferor to a
German transferee. 46 The transferor was dispossessed of the goods and the
agreement was subject to German law. Nevertheless, the Court ruled that
this agreement was contrary to French law – as the pactum commissorium is
prohibited in French law – and thus refused to give effect to the fiduciary
transfer. Later case law also argued on the basis of the contravention of
this contractual structure with the requirement of dispossession. However,
this judgment was criticised by legal scholars. It was observed that PIL was
not adapted to the developments in substantive law, which acknowledged
more flexible security interests. L. d’Avout writes significantly that ‘the
jurisprudential policy consisting in the rejection of foreign non-possessory
security interests gradually terminates.’ (We will not expand on the desir-
45
M. Cabrillac and C. Mouly, Droit des sûretés (Paris: Litec, 2002), n° 530.
46
Req. 24 May 1933, Dalloz hebomadaire 1933, 378 and Recueil Sirey 1935, I,
257, note H. Battifol. This judgment was confirmed in 1969: Cass. fr. 8 July
1969, Juris-classeurs périodiques 1970, n°. 18.169, note H. Battifol.
136
Vincent Sagaert
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