Party Autonomy in International Property Law - Peace Palace Library

1. Choice of Law in International Property Law
The same applies to the protection offered by the avoidance of acts, i.e.
the action to set aside transactions causing inacceptable detriment to the
creditors. For international cases, special conflict rules for this revocatory
action have been developed in the pertinent statutes, case law and literature;
they are understandably supposed to be mandatory. 56 Avoi dance in
the international field does therefore not require assistance from a mandatory
reference of the detrimental act of transfer to the law of the location
of the transferred asset.
In sum, a ‘creditors’ rights system’ ensures its application to cross-border
cases through its own mandatory standards and rules of jurisdiction, remedies
at law and choice of law for enforcement, insolvency and avoidability.
In substantive domestic law, there is no greater creditor protection with
regard to individual assets than through enforcement, insolvency proceedings
and avoidance. Hence, there is no reason for international property
law to make its own further contribution towards a mandatory choice of
law in the interest of creditors.
In referring to the ‘creditors’ rights system’, incidentally, the aforementioned
authors also mean the legal policy pursued by a country to create
a reasonable overall proportion between secured and unsecured credit,
that is, to ‘control the volume of available asset-based credit security in
the economy and thereby protect the class of unsecured creditors’. 57 The
extent to which this sort of governmental policy is worth enforcing internationally
against the interest in freedom of choice of law is taken up
below in the discussion of security rights. 58
V. Third parties as title-holders
Freedom to choose the applicable law in property transactions is a serious
policy problem if it affects the existing rights of other persons in the
asset. This may occur under substantive law if a non-entitled party alienates
or encumbers the asset and the other party is acting in good faith
and therefore, under the applicable law, would acquire the granted right,
56
Article 4(2) (m) and Article 13 European Insolvency Regulation (EuInsVO);
§ 339 InsO; Schwind, Internationales Privatrecht, nr. 508-515.
57
Kieninger, Mobiliarsicherheiten, 172.
58
Under footnote 80, 81.
Axel Flessner
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