Party Autonomy in International Property Law - Peace Palace Library

D. Assignment; Financial Instruments; Insolvency Law
Under a conflict rule based upon party autonomy, subsequent assignees
are adequately protected when assignment is referred to the law chosen
by the parties. They can determine in accordance with the law they have
selected themselves whether they would be protected against an earlier assignment
and whether such protection requires notification of the assignment.
In transactions where there are multiple assignments of the same
claim and the subsequent assignment is cross-border in nature, it must be
admitted, that the cross-border character of the second assignment and
the resulting application of some other law may sometimes come as a disappointment
to the first assignee, particularly where the law governing the
second assignment would give priority to a subsequent assignment (e.g.
English law), while the law under which he acquired the claim would not
protect a second assignee (e.g. German law). This is, however, part of the
intrinsic risk of conducting business in a world of different laws, and does
not really increase the basic risk of there being competing assignments,
particularly as the law governing the subsequent assignment has to start
with the results achieved under the previous assignment and its law (see
below). Moreover, if the second assignee, aware of an earlier assignment,
deliberately chooses a legal system protecting a second assignee, his lack
of good faith may be fatal. 20
The use of a conflict rule based upon party autonomy has been said to
lead to a deadlock situation in the case where a receivable has been assigned
multiple times and each assignment is governed by a different law.
As a result of this a priority conflict is said to arise between the assignees,
for which a conflict rule referring assignment to the proper law of the
underlying contract between the assignor and the assignee would provide
no solution. 21 As has been stressed before, this point of criticism is
clearly wrong. 22 The proper law of the subsequent assignment would not
20
Article 1690 Belgian Cc.
21
See e.g., V. Sagaert, De zakenrechtelijke werking van de cessie: de nieuwe iprregeling
na de wet van 2 augustus 2002, Tijdschrift voor Privaatrecht (TPR)
40 (2003), p. 561, 580; H.C. Sigman & E-M. Kieninger, The Law of Assignment
of Receivables: In Flux, Still Uncertain, Still Non-Uniform, in: H.C.
Sigman & E-M. Kieninger (eds.), Cross-border Security over Receivables,
München: Sellier. European law publishers 2009, p. 61.
22
See A. Flessner & H. Verhagen, Assignment in European Private International
Law, 2006, p. 32-36; H.L.E. Verhagen & S. van Dongen, Cross-Border Assignments
under Rome I, Journal of Private International Law (JPIL) 6 (2010),
p. 17-18. See further A. Flessner, Rechtswahlfreiheit auf Probe – zur Überprü-
196
Hendrik Verhagen
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