question has any merits at all). The difficulties which are created when the floating charge is introduced into (or forced upon) a jurisdiction based on Roman law are exemplified in the Scottish report to case 11. Finally, one can perhaps identify a difference in the overall attitude taken towards security rights: there are jurisdictions, like England, Germany or the United States, where the law seeks to provide creditors with more or less unrestricted freedom to contract for the security they think they need, and others, like France or the Nordic countries, which in the interest of general, unsecured creditors try to limit the range of available security.

III. Private international law

1. Tangible movables: lex rei sitae and the limits of the doctrine of transposition

The divergencies which have just been mentioned with respect to the substantive rules would create fewer or perhaps even no difficulties for international trade if the parties could choose the applicable law. Yet, the freedom in choice of law which is the rule for contractual obligations (article 3 Rome Convention56) does not apply in the field of property law. In the EU Member States, it is the lex situs which determines questions of property law with respect to immovables and movables alike;57 in the United States, Art. 9 UCC submits proprietary security rights in movables to the law at the place of the debtor.58 The substantial literature which argues in favour of party autonomy59 has not found a positive response

56Convention on the law applicable to contractual obligations of 19 June 1980, OJ EC No L 266/1 of 9 Oct. 1980.

57Cf. Venturini, International Encyclopedia of Comparative Law, Vol. III: Private International Law, chapter 21, ‘Property’ 3 ff.; Kieninger, ERPL 1996, 41 (47 n. 33); Kreuzer, Recueil des Cours 259 (1996) 9 (44 ff., 53 ff. and 253 ff. each with further references). In Germany, the rule was incorporated in article 43(1) EGBGB by the 1999 reform of the act on private international law (EGBGB).

58See revised Articles 9s--301 ff. UCC.

59In favour of party autonomy which is not limited to the relationship inter partes: Gaudemet-Tallon, note Cass. 8 July 1969, JCP 1970 II, 16182; Khairallah, Les suretésˆ mobilières en droit international privé 181 ff. For freedom as to choice of law with limited effects or limited applicability: Chesterman, ICLQ 22 (1973) 213 (223); Drobnig, RabelsZ 32 (1968) 450 (470 f.); Mayer, JCP 1981 I 3019 (para. 14); Mazzoni, in: Rapports nationaux italiens au Xe Congrès International de Droit Comparé 245 (277 ff.); Ritterhoff, Parteiautonomie im internationalen Sachenrecht; Staudinger/Stoll, Internationales Sachenrecht nos 282 ff. and 292 ff.; Stoll, IPRax 2000, 259 (264); Weber, RabelsZ 44 (1980) 510 (524). Cf. further the summaries in Kaufhold, Internationales und europäisches Mobiliarsicherungsrecht 159 ff. and Rott, Vereinheitlichung des Rechts der Mobiliarsicherheiten

25 ff.

from courts or legislatures. If freedom as to choice of law is granted, as is the case for example in Switzerland,60 the effects are confined to the relationship inter partes.

Applied to security rights in property that moves across borders, the lex situs rule leads to what is known as a ‘conf lit mobile’.61 If, for example, a security right is created while the collateral is in State A and if enforcement is sought after the subject matter has been brought to State B, two different sets of property law rules have to be applied consecutively: the creation of the security right is subject to the laws of A but the rights which the secured party has as against competing creditors are to be determined by the laws of B. Evidently, this will lead to problems where the two sets of rules differ. In some instances, these problems may be overcome through the so-called doctrine of transposition. Perhaps the first case where this doctrine has been applied (although not named as such) is The Colorado decided by the English Court of Appeal.62 The Colorado had been charged with a French hypothèque maritime to a French bank. Later, a shipyard in Cardiff carried out repairs which were not paid for and therefore also claimed a right in the ship. The question arose as to which of these competing rights had priority. The Court applied English law as the law of the actual situs. It held that the French hypothèque maritime equated more or less to the English maritime lien and that therefore the priority rules of the maritime lien had to be applied. In the end, this placed the French bank in an even better position than it would have been in under French law. Another good illustration of the doctrine of transposition is a case decided by the German Bundesgerichtshof in 1963.63 A van had been charged in France with a gage sur véhicule to a French bank. When in Germany, the vehicle was seized in execution proceedings on behalf of a third-party creditor. The question was whether the gage sur véhicule gave the bank a right to preferential treatment under German execution law. The court held that although German law had to be applied after the change of the situs, it was nevertheless necessary to take previously established property rights into

60See article 104 s. 2 Swiss Act on private international law (Bundesgesetz über das Internationale Privatrecht of 18 Dec. 1987, in force since 1 Jan. 1989, Bundesblatt 1988 I, 5--60).

63BGH 20 Mar. 1963, BGHZ 39, 173. In that decision the Court did not expressly use the term ‘transposition’ although the judges did refer to Hans Lewald, who had developed the theory in his Cours Général at the Hague Academy: cf. Lewald, Recueil des Cours 69 (1939-III) 129 ff. In a later decision, however (BGH 11 Mar. 1991, NJW 1991, 1415), the BGH quoted his earlier judgment as a precedent for the ‘predominating doctrine of transposition’.

account for the sake of international trade. Since German law accepted security transfer of ownership, it could not be argued that the principle of publicity was so fundamental to German law as to deprive a registered, non-possessory pledge of its validity. The BGH concluded that the gage sur véhicule could be translated into a fiduciary transfer of property, and that the French bank therefore had a right to preferential treatment in the same way as if it had acquired security ownership according to German law.

The doctrine of transposition is, however, unable to solve cases where the collateral is moved from a jurisdiction less strict in attitude to a stricter one. This may be illustrated by the following decision of the French Cour de cassation.64 Security ownership in a car had been transferred to the plaintiff, a German bank, as security for a loan while the car was in Germany. Subsequently, the car was driven to France where the owner of a garage executed against the car because of outstanding debts for repairs. The Cour de cassation refused to recognise the security right of the plaintiff. A transposition into a possessory pledge was impossible as was a transposition into a gage sur véhicule since the plaintiff’s right was not registered. This example clearly shows that ‘where the substantive rules differ, private international law can only appeal to try to bridge the gap but it cannot itself provide the necessary material for building that bridge’.65

2. Claims: article 12 of the Rome Convention and its various interpretations

As we have seen, in all EU Member States, the lex situs is regarded as the connecting factor for proprietary rights in movables. With claims, the position is less clear. Article 12 of the Rome Convention deals explicitly only with two legal relationships. First, the contractual relationship between assignor and assignee is submitted to the proper law of the assignment (article 12(1)). Second, the assignability and the relationship between assignee and debitor cessus are both submitted to the law governing the right to which the assignment relates (article 12(2)). In an earlier draft of the Convention, article 16(2), which has now become article 12(2), extended its sphere of application also to the relationship between the parties to the assignment and third parties, such as, for

64Cass. 8 July 1969 Rev.crit.d.int.p. 60 (1970) 75.

65See Drobnig, in: Festschrift für Kegel 141 (150): ‘Stimmen diese Rechtsordnungen inhaltlich nicht überein, so vermag das Kollisionsrecht nur noch die Parole des Brückenbaus auszugeben, jedoch fehlt in seinem Arsenal das notwendige Baumaterial.’

example, creditors of the assignee. This provision was dropped, first because the drafters thought it fell outside the ambit of the Convention, which focuses on contractual relationships, and secondly because, following the accession of the United Kingdom, Ireland and Denmark to the EEC, there was no longer agreement as to the proper rule for third-party relationships.66 In the absence of any clear-cut rule, there are at least four possible solutions: the Hoge Raad67 and a substantial literature in the Netherlands68 and Germany69 opt for article 12(1) and hence for party autonomy.70 The BGH71 and the English Court of Appeal in the Raiffeisen case72 consider article 12(2) Rome Convention as the proper rule. The same solution is favoured by the predominant opinion in German literature73 despite the problems it evidently presents for bulk assignments in an international context. In France, the law that is applied to the question whether an assignment is ‘opposable’ is traditionally the law at the place of the debitor cessus’ residence or business,74 although there is now also considerable support for applying article 12(2) Rome Convention.75 A fourth opinion suggests the assignor’s place of

66Cf. further Kieninger, RabelsZ 62 (1998) 677 (689 ff.).

67Hoge Raad 16 May 1997, Rechtspraak van de Week 1997, no 126 c.

68Cf. Bertrams/Verhagen, WPNR 1993, 261; Vlas, ‘Goederenrechtelijke aspecten van cessie in het IPR’, Ars Aequi 47 (1998) 213; de Ly, NIPR 1995, 329 (335). Contra (in favour of article 12(2) Rome Convention): Steffens, Overgang van vorderingen en schulden in het Nederlandse internationaal privaatrecht 214 ff.

69Cf. Stadler, IPRax 2000, 104; Stadler, Gestaltungsfreiheit und Verkehrsschutz durch Abstraktion 707 ff.; Einsele, ZVglRWiss 90 (1991) 1 (17 ff.).

70In a piece of legislation relating to reform of control over financial markets (Law of

2 Aug. 2002 concerning surveillance of the financial sector, Moniteur Belge, 4 Sep. 2002) the Belgian legislator had introduced a private international law rule supplementing art. 12 Rome Convention. Art. 145 of the law states: ‘The enforceability of the agreement of assignment against third parties other than the debtor shall be determined according to the law applicable to the agreement of assignment.’ This legislation has recently been repealed.

71BGH 20 June 1990, BGHZ 111, 376; BGH 8 Dec. 1998, IPRax 200, 128 (note Stadler at 104 ff.) and JZ 1999, 404 (note Kieninger).

72Raiffeisen Zentralbank Österreich AG v Five Star Trading LLC and others [2001] 2 WLR 1344. Cf. Stevens/Struycken, LQR 118 (2002) 15 ff.

73Münchener Kommentar/Martiny, article 33 EGBGB nos. 2, 7; von Bar, RabelsZ 53 (1989) 462 (467--471); von Bar, Internationales Privatrecht, vol. II, nos. 565--567; Soergel/von Hoffmann, article 33 EGBGB nos. 7, 12; Basedow, ZEuP 1997, 615 (621).

74Sinay-Cytermann, Rev.crit.d.i.p. 81 (1992) 35 (42). See further the references to French court decisions in: Lagarde, Rev.crit.d.i.p. 80 (1991) 287 (336). The French solution can be explained by French substantive law which requires an assignment to be formally notified to the debitor cessus or accepted by him: see article 1690 Cc.

75Batiffol/Lagarde, Droit International Privé, vol. II, 339; Khairallah, Les suretésˆ mobilières en droit international privé 278; Pardoel, Les conf lits de lois en matière de cession de créance no 385.