- •Contents
- •General editors’ preface
- •Preface
- •Contributors
- •Table of cases cited by name
- •England
- •Ireland
- •Netherlands
- •New Zealand
- •Scotland
- •South Africa
- •United States of America
- •Table of legislation
- •Austria
- •Belgium
- •Denmark
- •England
- •Finland
- •France
- •Germany
- •Greece
- •Ireland
- •Italy
- •Netherlands
- •Portugal
- •Scotland
- •South Africa
- •Spain
- •Sweden
- •Abbreviations
- •1 Introduction: security rights in movable property within the common market and the approach of the study
- •A. A short survey of the status quo
- •I. Economic reasons for the existence of security rights
- •II. Security rights in movable property: main divergencies
- •III. Private international law
- •1. Tangible movables: lex rei sitae and the limits of the doctrine of transposition
- •2. Claims: article 12 of the Rome Convention and its various interpretations
- •IV. The need for harmonisation within the EU
- •V. Attempts at harmonisation or unification: past and present
- •1. European Union
- •2. UNCITRAL
- •3. UNIDROIT
- •4. European Bank for Reconstruction and Development
- •B. The approach and purpose of the study
- •I. The ‘Common Core methodology’ as applied to secured transactions
- •II. Surveying the legal landscape against the background of a need for harmonisation
- •III. The genesis of the book
- •1. Narrowing down the topic
- •2. On terminology and the glossary
- •3. Order of the national reports
- •Bibliography
- •2 A labyrinth of creditors: a short introduction to the history of security interests in goods
- •1. Introduction
- •2. Justinian Roman law
- •3. Later developments in the European ius commune
- •4. Security interests in movables in the continental European codes
- •5. Common law and civil law
- •Bibliography
- •Brief description of key features of Article 9
- •History and context
- •Article 9 in depth
- •Creation, attachment and enforceability of a security interest
- •Scope of Article 9’s coverage
- •Perfection
- •How is perfection achieved?
- •Priority rules
- •Third-party rights
- •The filing system
- •Post-default rights and remedies
- •Conclusion
- •A. Article 9 through the eyes of an English lawyer
- •B. The values of English law
- •C. The future of English law
- •D. Summary
- •Postscript
- •Bibliography
- •5 The European Bank for Reconstruction and Development’s Secured Transactions Project: a model law and ten core principles for a modern secured transactions law in countries of Central and Eastern Europe (and elsewhere!)
- •Introduction
- •The EBRD Model Law on Secured Transactions: four objectives
- •The EBRD Ten Core Principles
- •How does the Model Law score? Answers to the questionnaire
- •Cases 1 and 2
- •Case 3
- •Case 4
- •Cases 5 and 6
- •Cases 7 and 8
- •Cases 9 and 11
- •Cases 10 and 14
- •Cases 12 and 13
- •Case 15 and a conclusion
- •Abbreviations
- •Germany
- •Austria
- •Greece
- •France
- •Belgium
- •Portugal
- •Spain
- •Italy
- •The Netherlands
- •England
- •Ireland
- •Scotland
- •South Africa
- •Denmark
- •Sweden
- •Finland
- •Evaluation/Comparative observations
- •Bibliographies
- •Germany
- •Austria
- •Greece
- •France
- •Belgium
- •Portugal
- •Spain
- •Italy
- •The Netherlands
- •England
- •Scotland
- •South Africa
- •Denmark
- •Sweden
- •Finland
- •Comparative observations
- •Glossary
- •I. Introduction
- •Questions
- •Discussions
- •Effects of bankruptcy
- •General remarks on transfer of ownership
- •Comparative observations
- •part (a)
- •Passing of ownership
- •part (b)
- •part (c)
- •Case 2: The deceived seller
- •Question
- •Discussions
- •Comparative observations
- •Abstract and causal systems
- •Protection of third parties
- •Case 3: Machinery supplied to be used by the buyer
- •Questions
- •Discussions
- •Comparative observations
- •Parts (a) and (e)
- •Part (b)
- •Part (c)
- •Part (d)
- •Case 4: Jackets for resale
- •Question
- •Discussions
- •Comparative observations
- •Case 5: Motor cars supplied and resold (I)
- •Questions
- •Discussions
- •Comparative observations
- •Part (a)
- •Part (b)
- •Part (c)
- •(i) Solutions which do not require additional clauses or transactions
- •(iii) Assignment of the proceeds
- •(v) Contracts other than sale under retention of title (consignment and commission)
- •(vi) Rights in the sold goods other than retention of title
- •(vii) Summary
- •Case 6: Motor cars supplied and resold (II)
- •Questions
- •Discussions
- •Comparative observations
- •Part (a)
- •Part (b)
- •Case 7: Supply of material to manufacturer (I)
- •Questions
- •Discussions
- •Comparative observations
- •Part (a)
- •Part (b)
- •Part (c)
- •Part (d)
- •Case 8: Supply of material to manufacturer (II)
- •Questions
- •Discussions
- •Comparative observations
- •Parts (a) and (b)
- •Part (c)
- •Part (d)
- •Case 9: Too many toasters
- •Questions
- •Discussions
- •Comparative observations
- •Part (a)
- •(i) Validity of all-sums clauses
- •(ii) Invalidity of all-sums clauses
- •(iii) All-sums clauses and commingling
- •(iv) Invalidity of simple retention of title
- •Part (b)
- •Part (c)
- •Questions
- •Discussions
- •(i) Principle of publicity
- •(iii) Unconscionability
- •Comparative observations
- •Parts (a)--(c)
- •(i) Use of ownership for security purposes
- •(ii) Security rights based on the idea of a pledge without dispossession
- •Part (d)
- •Case 11: Bank loan for a wholesaler
- •Questions
- •Variation
- •Discussions
- •Stock-in-trade containing goods sold under retention of title
- •Variation
- •Variation
- •Variation
- •Variation
- •Variation
- •Variation
- •Variation
- •Variation
- •Variation
- •Variation
- •Variation
- •Variation
- •Variation
- •Variation
- •Variation
- •Variation
- •Comparative observations
- •Parts (a)--(c)
- •Part (d)
- •Variation
- •Case 12: Bank loan on the basis of money claims (I)
- •Questions
- •Discussions
- •Comparative observations
- •(iii) Further requirements
- •Case 13: Bank loan on the basis of money claims (II)
- •Questions
- •Discussions
- •Comparative observations
- •Parts (a)--(c)
- •Part (d)
- •Case 14: Finance leasing of computers
- •Questions
- •Discussions
- •Comparative observations
- •Part (a)
- •Part (b)
- •Part (c)
- •Part (d)
- •Case 15: Indebted businessman sells business to brother
- •Questions
- •Discussions
- •Comparative observations
- •Part (a)
- •Parts (b) and (c)
- •A. General tendencies
- •I. Common developments
- •1. Evolution of secured transactions law outside the Civil Codes
- •2. No unitary, functional approach to security rights
- •3. Enlarging the range of security rights
- •4. Limiting the rights of secured creditors in insolvency
- •6. The rise of contractual devices coupled with title-based security rights
- •II. Persisting differences
- •1. General attitude towards security rights in movables
- •B. Convergences and divergences in relation to specific security rights
- •I. Security rights with strong convergence
- •1. Simple retention of title
- •2. Leasing
- •II. Security rights where some elements of convergence are present but where significant differences continue to subsist
- •1. Security rights in entities of property -- enterprise charge
- •2. Security assignment of claims or charge over claims (outside retention of title)
- •3. Extensions of retention of title
- •4. Non-possessory security rights in individualised property (other than retention of title and leasing)
- •C. Possible ways towards harmonisation
- •I. Simple retention of title
- •II. Harmonisation or unification beyond simple retention of title
- •1. Form, scope and context
- •2. Main policy choices concerning the substantive rules
- •(a) Uniform, functional approach
- •(b) Range of possible collateral
- •(c) Publicity
- •(d) Priority
- •(e) Special rules for purchase-money security interests
- •Bibliography
- •Index by country
- •Index by subject
592 s e c u r i t y r i g h t s i n m o v a b l e p r o p e r t y
is designed to be a security right in a large, but fluctuating, mass of property.
(b)A bailiff could execute against B’s claim against the customer, D. An enterprise charge would not prevent this. An enterprise chargee would be entitled to be paid from the proceeds of execution, if the bailiff considers that the execution would otherwise endanger his or her rights. If the property subjected to execution is not also charged or assigned for security purposes, the enterprise chargee has normally the best preferential right to the proceeds.
(c)The claims would belong to the insolvency estate. The enterprise chargee would have a high preferential right to 50 per cent of the net assets of the estate, except for immovables.
(d)No limits are imposed on the value of the collateral that may be included within the ambit of an enterprise charge. The efficacy of the security is restricted, however, by limiting, in the legislation, the preferential right of the enterprise chargee to 50 per cent of the net assets of the estate.
Comparative observations
Parts (a)--(c)
In contrast to the previous case, case 13 involves what are clearly future claims. Nevertheless, the majority of jurisdictions offer a practical method by which security can be created over such claims, at least by way of a global security right such as an enterprise charge (f loating charge or nantissement de fonds de commerce). Some reports emphasise that the security right can only come into existence once the claim has arisen. This is true for all legal systems. The crucial question is whether the parties to the security agreement can, prior to the point at which the claim arises, do all that is necessary for the security right to come into existence. It is only then that it is practicable to use future claims as the subject matter of a security right.
Notification of the debtor requires that his identity is known. It is not practicable to assign or charge future claims in any system that requires notification for the assignment or charge to be valid in respect of third
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593 |
parties. This applies to France,38 the Netherlands,39 Scotland, Denmark, Sweden and Finland. France, Scotland, Sweden and Finland allow instead future debts to be included within the ambit of a global charge over the enterprise40 (f loating charge or nantissement de fonds de commerce). It should, however, be noted that on the facts of case 13 a f loating charge could not be established in England, Ireland or Scotland because B is a sole trader, not a company.
The use of future claims as collateral for a security right is practicable in all those jurisdictions either which do not make notification of the debitor cessus a prerequisite for the assignment’s validity as against third parties in general (Germany, Greece, Belgium, England, Ireland and South Africa) or where it is possible to substitute for notification a procedure that can be given effect to while the identity of the future debtor remains unknown (book entry in Austria, registration of a privilegio in favour of a bank according to article 46 of the Italian Banking Act of 1 September 1993).
Part (d)
In the context of security rights in stock-in-trade,41 we have already seen that the issue of oversecurity is, or rather was, a matter of concern mainly for German courts and legal science, although one can probably consider the Greek discussion as to whether a global security assignment is contrary to article 178, 179 or 281 A.K. to be in the same vein. One might be tempted to think that the liberal attitude German and Greek law take towards security ownership and security assignment lies at the root of this discussion. However, as has become more and more apparent during the course of these cases, there are other European systems that take no less an open view on the admissibility of security rights over claims and movables. Some possible, but less than entirely satisfactory, explanations have already been advanced in the comparative observations to case 11(d). The special route taken by German judge-made law
38For a Dailly assignment, the identity of the debitor cessus must be known.
39The master-lists described in the Dutch report are only effective with regard to claims existing at the time of registration or arising from relationships existing at that time. For future claims in the strict sense a new registration is necessary. The debate on the validity of the master-lists concerns the specificity requirement, i.e. the charged claims must be sufficiently specified by the registered deed which does not mean that they should all be mentioned in this deed.
40 In the future this may also be possible in Greece. |
41 See supra, case 11(d). |
594 s e c u r i t y r i g h t s i n m o v a b l e p r o p e r t y
in the years prior to the BGH’s landmark decision of 1997 might also be explained by the fact that in German contract law in general, the judicial control of consumer and commercial contracts under the Unfair Contract Terms Act (AGBG), which is in the meantime incorporated into the BGB (§§ 305 ff.), and the insistence that any contract clause found to be unfair (e.g. a clause in a loan contract containing a security agreement) be regarded as wholly nullified (§ 306 BGB), has reached a degree that might from the outside be well regarded as exaggerated.