Private International Law of Security in Movables

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Private International Law of Security in Movables

• Current Issues in the Area of Cross-border
  Security Right Transactionsin Corporal Movables
• Lecture at the Hague Academy of International
  Law, Summer 2008, July 7-11

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• Overview
• First Part Foundation
• A. Introduction
• B. In rem Security Rights in Tangible Personal
  Chattels and Their Function
• C. The Structure of in rem Security Rights in
  Tangible Personal Chattels
• D. The Principle of Lex Rei Sitae in Property
  Conflict of Law Rules

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• Second Part Analysis and Discussion
• E. The Problem of Change in Governing Law
  (Conflit Mobile Statutenwechsel)
• F. Different Options to Solve the Problem of a
  Change of Governing Law
• G. Techniques of Integration Substitution,
  Transposition

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• Third Part Consequences and Conclusion
• H. Comparative Overview on Special Choice of Law
  Rules for in rem Security Rights in Tangible
  Personal Property
• I. The European Discussion The Principle of
  Mutual Recognition in the European Common Market?
• J. Substantive Uniform Law instead of Conflict of
  Law Rules Sectoral, Global, Regional
• K. In rem Security Rights in Tangible Personal
  Property and Private International Law

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• First Part Foundation
• A. Introduction
• I. The Old Problem
• II. A New Principle in the European Community
• III. Uniform Law Regional or Global?
• IV. The Syllabus

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• B. In rem Security Rights in Tangible Personal
  Chattels and Their Function
• I. Subject Matter of this Course
• 1. Property Rights and Personal Rights
• 2. Security Rights in Tangible Property
• 3. Consensual Security and Non-consensual
  Security
• II. The Economic Function of Security Rights in
  rem
• 1. Reduction of Risk for the Lender Advantage
  for the Borrower
• 2. Investment Effect on the National Economy

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• C. The Structure of in rem Security Rights in
  Tangible Personal Chattels
• I. Possessory and Non-possessory Security Rights
• II. Two Types of Security Rights Security Right
  in an Collateral owned by the Recipient of
  Security or in an Asset Owned by Someone Else
• III. Uniform Law and Diversity of Security Rights

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• IV. German Law
• 1. Retention of Title (Eigentumsvorbehalt)
• 2. Transfer of Title for Security Purposes
  (Sicherungsübereignung)
• 3. Pledge (Besitzpfandrecht)
• 4. Publicity

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• V. French Law
• 1. Retention of Title, Pledge Requiring
  Possession and Pledge Requiring Registration
• 2. The Newly Adopted Security Right of Fiducie
• a. Basic Structure of the Fiducie
• b. Comparison to Transfer of Title for Security
  Purposes
• c. Comparison to the Trust under English Law

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• VI. English Law
• 1. Reservation of Title
• 2. Pledge (Pawn)
• 3. Chattel Mortgage
• 4. Equitable Property
• 5. Floating Charge on Corporate Assets

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• VII. US Law
• VIII. Structures
• 1. Pledge
• 2. Special Pledges Requiring Registration, not
  Possession
• 3. Property Rights as Means of Credit Security
  Retention of Title and Transfer of Title for
  Security Purposes
• 4. Uniform, Functional Property Right for
  Security Purposes

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• D. The Principle of Lex Rei Sitae in Property
  Conflict of Law Rules
• I. Basic Principle of Property Conflict of Law
  Rules
• 1. No Principle of Public International Law
• a. Lex Rei Sitae as Rule of Universal Legal
  Belief
• b. The Basic Idea of Vested Rights, Droits
  Acquis, Wohlerworbene Rechte in the Area of
  Property Conflict of Law Rules

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• 2. Scope of Application of the Real Statute and
  Characterization
• 3. Ratio and Limits of the Connecting Factor Lex
  Rei Sitae
• a. Policy Considerations Interest of the
  Parties, Interest of Commerce, State Interest in
  the Respect of Basic Structural and Value
  Considerations
• aa. Principle of the Closest Connection
• bb. Interests of the Parties to the Transaction
  in rem

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• cc. Interest of Commerce (Verkehrsinteresse)
  Market Policies
• dd. Protection of Legitimate Reliance on Existing
  Rights
• ee. State Interest in the Respect of Basic
  Structural and Value Consideration
• (1) Numerus clausus and Operation erga omnes of
  in rem Rights
• (2) Convergence between Applicable Property Law
  and Lex Fori
• (3) Harmony in International Judicial Rulings

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• b. Starting Point Undisputed Validity of Lex Rei
  Sitae in Case of Immovable Assets
• c. Transferability to Tangible Personal Chattels?
• II. Modern Critique Pertaining to the Rigid
  Application of the General Situs Rule
• 1. Individual Connection as Desired Rule Proper
  Law of the Transfer
• 2. Individual Rules of Connection and Escape
  Clause
• 3. Location of the Debtor (Person Providing
  Security)

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• Second Part Analysis and Discussion
• E. The Problem of Change in Governing Law
  (Conflit Mobile Statutenwechsel)
• I. Problem
• 1. Starting Position
• 2. Three Possibilities to Respond to a Change of
  the Lex Rei Sitae
• 3. Terminology Primary and Secondary Statute
• 4. False Conflict

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• II. Simple Change of Governing Law For Completed
  Requirements of Legal Change
• 1. Positive and Negative Completion of the
  Requirements for Legal Change
• 2. Open Requirements of a Legal Change
• 3. Consequences of a Simple Change in Governing
  Law, Where the Requirements of Legal Change Are
  Negatively Completed, and Inter-temporal Order

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• 4. Consequences of a Simple Change in Governing
  Law, Where the Requirements of Legal Change Are
  Positively Completed
• a. Split between the Statute Governing the
  Creation of Legal Rights and the Statute
  Governing the Legal Effects
• b. Ratio of the Split of the Real Statute

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• c. Effect of the Statute Governing the Legal
  Effects on Existing Rights
• aa. The Limit of Ordre Public
• bb. Statute Governing the Legal Effects as
  Limiting Statute Substantive Rules Limiting the
  Legal Effects
• cc. Transposition
• dd. Transposition Terminating the Legal Right
  Effet de Purge (Cleansing Effect)

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• ee. Critique on the Transposition Doctrine
• ff. Application of the Primary Law within the
  Boundaries of the Secondary Law
• gg. Special Provisions of the Secondary Country,
  in Particular Provisions on Grace Period
• (1) Art. 102 para. 2 Swiss IPRG
• (2) Art. 9 UCC
• (3) Law of Québec
• (4) Law of Liechtenstein

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• hh. Statute Governing Legal Effects as Limiting
  Statute Numerus Clausus and Predefined Classes
  of Legal Rights
• (1) Rationale of Numerus Clausus and Publicity
• (2) Local and International Cases

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• ii. Statute Governing the Legal Effects as
  Limiting Statute Publicity Requirements
• (1) Meaning and Analysis of Substantive Publicity
  Requirements
• (2) Publicity as Permanent Requirement
• (3) Publicity Requirements as Regulator of the
  Willingness to Incorporate of the Secondary Law

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• III. Qualified Change in Governing Law
• 1. Starting Point
• a. Security Interest Created under Primary
  Statute
• b. Creation of Security Interest Failed under
  Primary Statute
• c. Change of Governing Law During the Creation of
  a Security Interest
• 2. Two Legal Issues
• a. Implicit Conflict of Law Rules
• b. Substantive Legal Rule

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• F. Different Options to Solve the Problem of a
  Change of Governing Law
• I. Non-Possessory Security Rights as Problem of
  Transnational Commerce
• II. Unification or Harmonization of conflict
  laws
• 1. Possible Objectives
• 2. Treaty of Montevideo on International Trade
  Law (1940)

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• 3. Convention sur la Loi Applicable au Transfert
  de la Propriété en Cas de Vente à Caractère
  International dObjets Mobiliers Convention on
  the Law Governing Transfer of Title in
  International Sales of Goods (1958)
• 4. Convention on the Law Applicable to Contracts
  for the International Sale of Goods (1986)
• 5. Organization of American States (OAS) Model
  Inter-American Law on Secured Transactions (2002)

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• 6. UNCITRAL Legislative Guide on Secured
  Transactions (2007)
• 7. Assessment

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• III. Recognition of Foreign Security Rights
• 1. Basic Idea of a Recognition of Rights
• 2. Issues to Be Settled
• a. Uniform Determination of Creation Requirements
• b. Uniform Determination of Recognition
  Requirements
• c. Uniform Determination of Effects of
  Recognition

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• 3. Recognition of Security Rights Created Abroad
  by Conventions
• a. United Nations International Convention on
  Maritime Liens and Mortgages (1993)
• b. Convention on the International Recognition of
  Rights in Aircraft (1948)
• 4. Recognition as Policy on Integrated Markets
• 5. European Legislation

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• IV. Unification or Harmonization of Substantive
  Laws
• 1. Model Laws and Legislative Guide UCC, OAS,
  European Bank for Reconstruction and Development,
  UNCITRAL
• 2. Transnational Security Rights
• a. Basic Structure
• b. Uniform Requirements and Uniform Effect
• c. Conservation of National Property Law Systems
  and Avoidance of Transposition
• d. International and Internal Transactions

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• 3. Cape Town Convention on International
  Interests in Mobile Equipment (2001)
• a. Objective and Structure of the Cape Town
  Convention System
• b. Creation inter partes Agreement
• c. Third-party Effectiveness and Priority
• d. Scope of Application of the Convention and
  Conflict of Laws
• e. Conclusion

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• V. Adaptation of National Conflict and
  Substantive Law
• 1. Minimizing the Constellations, which Lead to a
  Change of the Governing Law
• 2. Substantive Law in View of the Consequences of
  a Change of the Governing Law

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• G. Techniques of Integration Substitution,
  Transposition
• I. The Issue
• II. Transposition, Substitution, Adaptation
• 1. Transposition
• 2. Resolution of the Institut de Droit
  International Substitution and Equivalence in
  Private International Law

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• III. Illustration Security Right under Art. 9
  UCC and German Law
• 1. Different Statutes Governing the Creation and
  Effects of Legal Rights as Cause of the Problem
• 2. Does the Applicable Provision of the Secondary
  Statute Allow for Substitution?
• 3. Which Content and Purpose Does the Applicable
  Provision of the Secondary Law Have?

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• 4. Is there Functional Equivalence between the
  Security Right under the Primary Law and the
  Requirements under the Secondary Law?
• 5. Internal Criterion for Equivalence Scrutiny
  The System of Creditor Rights of the Secondary
  Country
• IV. Scrutiny of Equivalence as Means of
  Integration of Foreign Security Interests
  Similarities and Distinction of Substitution and
  Transposition

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• Third Part Consequences and Conclusion
• H. Comparative Overview on Special Choice of Law
  Rules for in rem Security Rights in Tangible
  Personal Chattels
• I. Differentiation of Connecting Factors
• II. Special Conflict-of-Laws Rules for Means of
  Transportation
• III. Special Conflict-of-Laws Rules for Chattels
  in Transport (res in transitu)

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• IV. Special Conflict-of-Laws Rules for Chattels
  Intended for Export and Retention of Title Party
  Autonomy
• V. Conclusion

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• I. The European Discussion The Principle of
  Mutual Recognition in the European Common Market?
• I. Foundation
• II. Justification
• III. Application
• IV. Conclusion

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• J. Substantive Uniform Law instead of
  Conflict-of-laws Rules Sectoral, Global,
  Regional
• I. Need for Harmonization and Unification of the
  Substantive Law
• II. Chances of Sectoral Unification of the Law
• III. Chances of Regional Unification of the Law
• IV. Chances of a European Security Interest
• V. Desired Effect of Auto-Harmonization

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• K. In rem Security Rights in Tangible Personal
  Chattels and Private International Law
• I. Lex rei sitae, Law of the Location of the
  Debtor and Special Conflict-of-Laws Rules
• II. Lex rei sitae and Party Autonomy
• III. Integration Ability of the Substantive Law
  Substitution and Grace Periods