Party Autonomy in International Property Law - Peace Palace Library

D. Assignment; Financial Instruments; Insolvency Law
State where the debtor has an establishment as defined in Article 2 (h)
EIR is a foreseeable risk; hence, also in such cases the protection of legitimate
expectations may not be at stake where the transaction involved the
transfer or encumbrance of assets situated in that State.
12.2.4. Articles 5 (4) and 7 (3) EIR
The system thus laid down in Articles 4 and 13 EIR also applies with
respect to the reversal of the transfer or encumbrance of assets. With
respect to proprietary rights (including reservation of ownership), this
has been laid down explicitly in Articles 5 (4) and 7 (3) EIR. Pursuant to
these provisions, the fact that rights in assets located in a Member State
other than the State where the insolvency proceeding has been opened
are ‘isolated’ from the effects of the main insolvency proceeding ‘shall not
preclude actions for voidness, voidability or unenforceability as referred
to in Article 4 (2) (m)’.
Even though not explicitly referred to in Articles 5 (4) and 7 (3) EIR, the
defence provided for in Article 13 EIR can also be invoked by the creditor
who has obtained a proprietary right within the terms of Articles 5 and 7
EIR. 12 If, for example, a Spanish liquidator, appointed in main proceedings
opened in Spain, invokes the voidness or voidability of a right of pledge
created in assets situated in the Netherlands, the pledgee cannot claim
that, pursuant to Article 5 (1) EIR, the right of pledge is not affected by
the claw back provisions that are in place under Spanish insolvency law.
This is clearly expressed by Article 5 (4) IR. The pledgee can, however,
on the basis of Article 13 EIR, claim that the right of pledge is valid and
enforceable against the insolvent estate if it cannot be challenged under
Dutch (insolvency) law.
12.2.5. Lex causae: the law governing the proprietary
aspects of the transfer or encumbrance of assets
The EC Insolvency Regulation has adopted a system whereby a juridical
act can only be challenged successfully if it is subject to reversal under
the lex concursus as well as under the lex causae, including its insolvency
12
Cf. Veder 2004 (footnote 7), p. 316.
268
P. M. Veder
© sellier. european law publishers
www.sellier.de