Party Autonomy in International Property Law - Peace Palace Library

D. Assignment; Financial Instruments; Insolvency Law
the debtor of a claim agrees with its creditor that the debt will not be payable
unless a specific event happens. 65 This precise type of arrangement
is often used in relation to bank deposits. An example is a deposit placed
with a bank by a company which will only be repayable if and to the extent
that the company first pays its indebtedness to the bank under a loan.
In this approach, parties enjoy full autonomy to arrange their affairs as
they like. It would be possible to attach any number of conditions to the
account bank’s obligation to repay the deposit, for instance performance
of a group company’s obligations or even the obligations of an entirely
unrelated party towards the bank. Whether there are limits to the actual
conditions that could be used goes well beyond the scope of this chapter
and will not be discussed in any detail. Obvious limitations might result
from the ultra vires doctrine and from fraudulent preference rules. These
limitations are of little relevance here, however, because the central theme
of this chapter is the more fundamental question of whether contractual
arrangements could be used to give the claim against the bank specific
contents in order to create a (quasi-) security interest allowing the parties
to enjoy complete freedom in structuring their collateral arrangement.
The concept of a flawed asset providing effective security as an alternative
to charge-backs seems to have been explicitly accepted under English
law for instance by the House of Lords in Bank of Credit and Commerce
International SA (No 8) although, as with the conceptual acceptance of
the charge-back, it was in an obiter dictum. Lord Hoffmann:
‘The Court of Appeal said that the bank could obtain effective security
in other ways. If the deposit was made by the principal debtor, it could
rely upon contractual rights of set-off or combining accounts or rules
of bankruptcy set-off under provisions such as rule 4.90. If the deposit
was made by a third party, it could enter into contractual arrangements
such as the limitation on the right to withdraw the deposit in
this case, thereby making the deposit a ‘flawed asset.’ All this is true.
It may well be that the security provided in these ways will in most
cases be just as good as that provided by a proprietary interest. But
that seems to me no reason for preventing banks and their customers
from creating charges over deposits if, for reasons of their own, they
want to do so. (…)’
65
See Wood 2007b, § 29-021 and Goode-Gullifer 2008, § 1-21.
254
Reinout M. Wibier
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