Party Autonomy in International Property Law - Peace Palace Library

D. Assignment; Financial Instruments; Insolvency Law
of unsecured creditors. However, I agree with Professor Flessner – as he has
recently set forth in his contribution to the Koziol Festschrift 1 – that such
policy choices in insolvency legislation cannot exert a decisive influence
on the debate as to whether to accept party autonomy in international
property law. These policy choices, as they are for example reflected in the
ranking of claims, remain unaffected and will be given the desired effect,
since the enforcement of security rights remains governed by the relevant
enforcement statute, which cannot be freely chosen by the parties. As to
the enforcement of security rights in movables outside of insolvency, this
will be the law of the place where the movables are located. With respect
to the enforcement of security rights in insolvency, this will be the law
of the state where insolvency proceedings have been opened (with the
proviso, of course, that pursuant to Articles 5 and 7 of the EC Insolvency
Regulation [EIR] rights in assets situated in other Member States will
remain unaffected by the proceeding). Party autonomy in international
property law can only be relevant for the creation, transfer, and determination
of the content of security rights and not in respect of their enforcement.
When it comes to applying the rules of the enforcement statute,
it is in principle irrelevant whether a particular right was created under
foreign law. It is decisive whether the right in question can be given the
same effect as ‘local’ proprietary (security) rights within the rules of the
enforcement statute.
Nevertheless, it must be noted that on an international level, the position
of parties in insolvency proceedings may be ‘manipulated’ in a number
of ways.
Notwithstanding the intention of the EC Insolvency Regulation to avoid
incentives for parties to seek to obtain a more favourable position by
forum shopping, 2 practice shows that the applicable insolvency regime
can to a certain extent be manipulated by the debtor shifting his centre
of main interests to another – more favourable – jurisdiction. Pursuant
to Article 4 EIR, the law applicable to insolvency proceedings and their
1
A. Flessner, Rechtswahl im internationalen Sachenrecht – neue Anstösse
aus Europa, in P. Apathy et al. (eds.), Festschrift für Helmut Koziol zum 70.
Geburtstag, Jan Sramek Verlag, 2010, p. 137 / 138, (in translated version: see
Chapter 1 in this book on Party Autonomy in International Property Law,
Choice of Law in International Property Law, New Encouragement from Europe,
par. D, section IV).
2
Preamble EIR, par. 4.
262
P. M. Veder
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