Party Autonomy in International Property Law - Peace Palace Library

A. General Aspects of Party Autonomy
It is important to keep in mind initially that the physical enforcement
of the security right in the event of realization (seizure and sale, division
of the proceeds) and the legal defence against that enforcement are not
affected by the choice of law agreement, if the realization takes place with
the help of forced execution and insolvency law. The unalterable application
of forum law in enforcement and insolvency proceedings is nowhere
disputed 67 and, as to insolvency, has just been reaffirmed in the European
Insolvency Regulation (EuInsVO). 68 Some of the reservations about party
freedom of choice of law that are derived from the idea of a single state’s
‘creditors’ rights system’ should therefore appear to be settled 69 , because in
the view of the proponents of that idea the ‘system’ necessarily includes
the state’s insolvency and enforcement law. 70 Its precedence remains unaffected
by party autonomy. From the very outset, it is only the provisions
on creation, transfer and legal content in the security period (until the
credit is repaid or the security liquidated) that can be reached through
the choice of law agreement.
Allowing party autonomy with this limited effect also for security rights
has a model in Article 14 of the Rome I Regulation. That provision leaves
the law governing the third party effects of assignment of claims uniformly
to the will of the parties, regardless of whether the assignment is meant to
be final (as in purchases and gifts) or to serve as a credit security. The equal
treatment in the conflict of laws of the property aspects of a sale and of the
establishing of security rights is therefore already current European law; it
is consequently obvious in the case of tangible property too. In addition,
tangible goods and money claims as collateral in certain transactions such
as extended reservation of title, security transfer of changing stocks of
goods are treated by the parties as substitutable in any event.
In the provision of security for credit there is also a particular need for the
parties to have one and the same law govern the credit agreement and the
security (which is usually agreed along with the credit). In the case of pure
transfers of property, such as a sale or gift, delivery performs the contract
and leaves it behind, so that remaining contractual rights can now be
Law (2004); Sigman / ​Kieninger (eds.), Cross-Border Security over Tangibles
(2007); Plappert, Dingliche Sicherheiten in der Insolvenz (2008).
67
See footnotes 49-53 above.
68
Article 4, 5, 7 EuInsVO.
69
See footnote 48 above.
70
Particularly Kieninger, Mobiliarsicherheiten, 174.
34
Axel Flessner
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