Party Autonomy in International Property Law - Peace Palace Library

9. Party Autonomy and Assignment
possible that the insolvency legislation of that jurisdiction has no provisions
relating to this type of security. Does this mean that a creditor to
whom claims have been assigned by way of security would not be bound
by insolvency rules curtailing the enforcement of security over claims
(e.g. a statutory freeze), because the only type of security contemplated
by these rules is a pledge or charge over receivables? It does not. This is a
classic case of assimilation: (insolvency) rules designed for domestic legal
issues are applied by way of analogy to foreign legal institutions which
are functionally equivalent. This is precisely what the Hoge Raad ruled in
the Sisal-case. In the event that a creditor seeks to enforce its rights as a
security assignee in the Netherlands, the relevant rules designed for pledges
of the Dutch enforcement and insolvency laws will be applied, provided
that for the purposes of the Dutch provisions in question, the foreign
security right can as regards its content and purpose be treated equally as
the related Dutch security right. 25 On this basis, the holder of a common
law floating charge was allowed to request a so-called ranking order from
the court in the same manner as a pledgee under Dutch law would be
able to do. In this case, the assimilation process worked for the benefit of
the holder of a foreign security interest. However, it can also restrict the
enforcement of foreign security. For instance, article 63a of the Dutch
Bankruptcy Act, which imposes a statutory freeze on the enforcement
of pledges, should also be applied to foreign security assignments. In other
words, there are sufficient safeguards in the law of insolvency in order to
prevent the parties from evading its restrictions by choosing a different
property regime. 26
9.3. The effectiveness of an assignment against
third parties and priority
The conclusion which can be drawn from the foregoing observations
is that from the perspective of property law the principle of party autonomy
can be recognised. This is not to deny, however, that there are
persons other than the assignor and the assignee which have legitimate
interests in respect of claims which the law needs to take into account.
Sometimes it is the law of property itself which does so, as when bona
25
A. Flessner & H. Verhagen, Assignment in European Private International
Law, 2006, p. 40-41.
26
See Michael Veder‘s contribution to this book (Chapter 12).
Hendrik Verhagen
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