Party Autonomy in International Property Law - Peace Palace Library

D. Assignment; Financial Instruments; Insolvency Law
systems accept a choice of law with third-party effects. In this respect,
reference can be made to, for example, the rules regarding the assignment
and charging of receivables under Dutch private international law
(and, as some authors argue, Rome I in its current form) and the Hague
Trust Convention. In the absence of uniform rules for a great number of
issues that are of direct relevance to international (financial) practice,
accepting party autonomy in the field of applicable law, also with effect
against third parties, allows parties to choose a legal system that best caters
for their needs. However, the interests of third parties such as the other
creditors should not be left out of the equation. This can be achieved by
imposing certain restrictions on the choice made for a particular law in
view of the application of rules like Article 13 EIR. In the exceptional
case that parties use their freedom to choose the law applicable to (the
proprietary aspects of) their transaction with the sole objective of making
the transaction immune against avoidance actions in insolvency, such
a choice of law should be disregarded for purposes of applying rules like
Article 13 EIR, and the lex causae should be determined in accordance
with the objective conflict of laws rules. With respect to such ‘fraudulent’
choices of law, a presumption could apply that a choice for a legal system
that in the circumstances of the particular case renders the transaction
immune for avoidance actions is presumed to have been effected with
the sole purpose of avoiding such insolvency avoidance if that law has no
reasonable connection with the transaction at hand (e.g. the location of
the parties or assets concerned).
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P. M. Veder
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