Party Autonomy in International Property Law - Peace Palace Library

A. General Aspects of Party Autonomy
III.
Third-party effect
The alienation or encumbrance of a piece of property works against all
uninvolved ‘third parties’. There seems to be a latent yet widespread notion
that, for this very reason, those involved in the transaction cannot
be allowed to determine the applicable property law, to shift aside the
provisions of the lex situs and thereby to impose at their will legal effects
on third parties. 47 However, this attitude denies something in international
property law that is self-evident in domestic property law. The law
of property allows the disposal with effect for third parties without their
consent, simply because the holder of the right has the freedom to dispose;
his disposal must be respected by all ‘third parties’ in the economic and
social environment – creditors, tax office, prospective acquirers, neighbours.
The third-party effect is an intrinsic part of the right to dispose in
property law. This would be contradicted by ‘switching’, in the conflict of
laws area, to making the untouchability of ‘third parties’ an ideal. Rather,
it is consistent with the power of disposal of the entitled party to leave
the decision on the applicable law to that party’s discretion too, that is,
to include this power under the characteristics of the right in rem with
the help of which disposal over the property is achieved. Even if the
third-party effect of a property disposal could be considered a bar to party
choice of law, then this would be worth considering only for those situations
where third-party protection would actually be a possible issue in
substantive property law. This will immediately become clear in the next
two ‘third party protection’ topics.
IV.
Creditors
The creditors of the disposing party are often portrayed as third parties
concerned in particular. It is said that they may not be deprived by a
choice of law agreement of an asset assured to them through the ‘system
of creditors’ rights’ at the location of the asset. 48
47
Thus, for example, Röthel, Internationales Sachenrecht im Binnenmarkt, JZ
2003, 1027, 1034. The notion also evidently forms the basis of Article 104(2)
of the Swiss International Private Law Act (see footnote 3 above). Further
comments of this sort demonstrated in Kieninger, Mobiliarsicherheiten im
Europäischen Binnenmarkt (1996) 35.
48
Stoll, Internationales Sachenrecht, nr. 360, 361; Basedow, Der kollisionsrechtliche
Gehalt der Produktfreiheiten im europäischen Binnenmarkt: favor of-
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Axel Flessner
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