Party Autonomy in International Property Law - Peace Palace Library

1. Choice of Law in International Property Law
enquiries depends largely on the circumstances. 65 If the parties involved
have chosen an otherwise remote but purchaser-friendly law to apply,
this may be a suspicious circumstance in itself; if, on the other hand,
they may have had other good reasons for choosing the law (for example:
adaptation to the underlying obligation, foreseeable cross-border change
of the asset’s location, shared country of residence of the parties involved,
familiarity with the chosen law), the fact that they may also know that the
chosen law looks favourably upon acquirers will be no reason for imposing
additional burdens of investigation on the acquirer.
E. Security rights
The closer analysis of interests carried out up to this point has shown
that a mandatory reference to the law of the place where the property is
located is not necessary for the transfer and creation of property rights
by a legal transaction and that the power of the parties to choose the
applicable law is in fact even superior. However, party freedom to choose
the law must pass the litmus test in relation to security rights – the most
common application of international property law in judicial practice and
the hardest, because there is a particularly marked and varied difference
between national laws in the securing of credit through movable property,
and countries use to operate clear legal policies in this field. The differences
relate to the necessary publicity, to protection of the debtor against
ill-considered moves, against economic constriction of debtors during
the credit period, against cheating and recklessness in the realization of
the security, as well as to the protection of unsecured creditors against
premature and excessive depletion of the debtor’s assets with which the
debtor is principally liable towards the creditors. Particularly striking are
the different attitudes towards non-possessory security, towards particular
types of credit (supplier credit, money lending), towards particular types of
collateral (current assets, equipment and fixed assets, vehicles, the whole
enterprise) and towards particular security conditions (security in future
assets, in bulk assets). 66 Can the parties involved be allowed to pick out
one of these national credit security systems?
65
Thus also Ritterhoff, Parteiautonomie 304.
66
See, for instance, the accounts by Kieninger, Mobiliarsicherheiten 23 et seq.;
Kieninger (ed.), Security Rights in Movable Property in European Private
Axel Flessner
33
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