Party Autonomy in International Property Law - Peace Palace Library

12. Party Autonomy and Insolvency Law
that is challenged by the administrator: the contractual obligation or the
subsequent proprietary act(s) by which the transfer or encumbrance is
effected. Referring the issue of the vulnerability exclusively to the law
governing the proprietary aspects of the transfer or encumbrance makes
this distinction between substantive national laws less important and the
rule easier to apply.
12.2.6. Scope of Article 13 EIR; lex causae is not
the law of a Member State
Article 13 EIR explicitly confers a ‘veto’ on the lex causae only if that
is the law of another Member State. Judging by its verbatim text, the
protection offered by Article 13 EIR only applies in cases where the challenged
act is governed by the law of another Member State. On the face
of it, Article 13 EIR does not lead to the inapplicability of Article 4 EIR
in cases where the lex causae of the challenged act is the law of a non-
Member State; hence, in such cases the reversal of the juridical act would
be governed by the lex concursus exclusively.
However, the question is whether such an a contrario reasoning is justified.
The need, if any, for the protection of the legitimate expectations of
parties dealing with the debtor that an act will not be subject to reversal
under the lex causae is not greater or lesser depending on whether the
law of a Member State or the law of a non-Member State applies to the
challenged act.
The Virgós / ​Schmit Report rejects such an a contrario reasoning. 15 In this
report it is observed that Articles 4 and 13 EIR aim to regulate the issue
of avoidance actions in line with the general scope of the EC Insolvency
Regulation, which only deals with the intra-Community effects of insolvency
proceedings. Following the Virgós / ​Schmit Report on this point,
this would mean that the EC Insolvency Regulation does not uniformly
prescribe that in the event the challenged act is governed by the law
of a non-Member State, the other party should be allowed to invoke
protection under the lex causae. But it also does not prescribe that in
such cases the vulnerability of the act only depends on the rules of the
lex concursus. In cases that go beyond the scope of the Regulation, the
Member States are free to decide which rules they deem most appropri-
15
Cf. Report Virgós / ​Schmit, Nr. 93.
P. M. Veder
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