BACKGROUND AND AIM

Since the entry into force of the Treaty of Amsterdam in 1999, the European Union has adopted an impressive number of regulations in the field of Private International Law and International Civil Procedure. As regards Private International Law in the narrow sense, i.e. rules determining the applicable law, these regulations cover contractual and non-contractual obligations, divorce and legal separation, matrimonial property and the property consequences of registered partnerships as well as succession. As regards international civil procedure, several regulations provide for uniform rules relating to jurisdiction, recognition and enforcement of foreign judgments in civil and commercial matters, inheritance and family law. In addition, a number of regulations ease the settlement of cross-border disputes more generally. This holds true for the Service Regulation, the Evidence Regulation, the Enforcement Order Regulation, the Small Claims Regulation, the Payment Order Regulation and the Insolvency Regulation.

The degree of legislative unification that has resulted from the European lature's activities has been described as the first true Europeanisation of Private International Law and as a ‘European Choice of Law Revolution’. However, after a certain initial euphoria or ‘gold rush fever’, a noticeable disillusionment has recently set in: has the far-reaching unification of the ‘law on the books’ turned Private International Law and International Civil Procedure into a truly European ‘law in action’? Doubts are in order for a number of reasons:

First, these regulations do not apply uniformly in the Member States. Denmark, for example, does not take part in any of the measures mentioned above, unless they are bilateralised by conventional international treaties with the European Union. In addition, Ireland and the United Kingdom decide on a case-by-case basis whether they wish to join certain measures. Moreover, there are some regulations, such as the Rome III Regulation and the recently adopted Matrimonial/Partnership Property Regulations, which are only applied in some Member States because they have been adopted through enhanced cooperation. Last but not least, the impending withdrawal of the United Kingdom from the European Union (‘Brexit’) raises additional questions about the continuing application of those regulations for which the country had previously declared an opt-in.

The question that forms the title of this book – ‘How European is European Private International Law?’ – may, at first impression, strike the reader who is unfamiliar with the subject as strange: isn't it already clear from the adjective ‘European’ associated with the noun ‘Private International Law’ that this legal field is precisely what it purports to be, i.e. ‘European’ in nature? In reality, creating a truly ‘European’ Private International Law is a more complicated endeavour, though. In fact, current Private International Law as it is applied by EU Member State courts is characterised by a multitude of legal sources, ranging from EU regulations to international conventions and domestic conflicts rules. Even where genuinely unionised conflicts rules do exist, the question arises as to whether these rules are actually applied in a uniform way because national procedural laws and domestic court systems diverge considerably. Last but not least, the Europeanisation of Private International Law poses intricate challenges for academic research and legal education, in particular with regard to domestic academic styles, traditions and career patterns, as well as the contents of the curricula taught at law faculties across Europe.

The contributions collected in this book address those issues from various angles. As editors, we wish to thank our authors for providing us with their insights and ideas.

Yet, there are more people to whom thanks are due. This publication grew out of a conference under the same title that was financed by the Deutsche Forschungsgemeinschaft (DFG) and held in March 2018 in the Harnack-House of the Max-Planck-Society (MPG) in Berlin, Germany. The editors wish to thank both the DFG for its generous support and the MPG for its hospitality. After Eva-Maria Kieninger had made a proposal for such an event, which was then discussed and fine-tuned with Giesela Rühl and Jan von Hein, the organisation of this conference was mainly carried out at Giesela Rühl's chair in Jena. The editors wish to thank Regina Franzl, Georg Höxter, Nicolas Koerrenz, and Corinna Hofmann from the University of Jena for their support in organising the conference. During the conference, further help was provided by our assistants Berthold Blatecki-Burgert, Pauline Köstner, and Alexander Holzer (all from Jena), Anna Bizer, Sinah Mosbach, and Lea-Ariane Rudolph (all from Freiburg), and Marlene Kellendorfer (Würzburg). In addition, thanks are due to Jan Varenkamp (TU Ilmenau) for creating the conference website.

(Simple retention of title)

A sells a machine to B. The contract contains the following clause: ‘Title to the machine is reserved until the seller has received full payment.’ Before the price has been paid, C, who is an unsecured creditor of B, executes against the machine. In the alternative, B goes bankrupt. In either case, the machine is on B's premises.

Questions

1. (a) What is A's legal position?

2. (b) Is the clause stated above sufficient to be effective? Is there a more suitable or common wording?

3. (c) Do the parties have to agree on the insertion of a retention of title clause? Or could the seller stipulate one unilaterally?

4. (d) Is the point in time at which the parties agree that title should be reserved relevant?

5. (e) Do A's rights in respect of the machine depend on anything other than the inclusion of a reservation of title clause in the agreement: for example, compliance with certain formalities (e.g. agreement in writing, agreement having a ‘certain date’) or registration? Are such clauses efficacious if they are simply contained in the seller's general conditions of sale?

Each of the fifteen cases has been concluded with comparative observations trying to take stock of the national solutions and to find reasons for at least some of the differences. The purpose of the present evaluation is neither to present a summary of these comparisons nor to give another overview of the law relating to security rights in the different jurisdictions under consideration. Rather, these final remarks aim at drawing a few more general conclusions in view of the need for some measure of European harmonisation that has been identified in the Introduction. Therefore, I will seek to identify common tendencies as well as subsisting differences both with respect to general principles and in relation to specific security devices. The evaluation will conclude with some suggestions as to possible ways for harmonisation.

General tendencies

Common developments

Evolution of secured transactions law outside the Civil Codes

A first, very general, but nonetheless significant common element lies in the fact that the development of secured transactions law on the Continent largely took place (and continues to take place) outside the national Civil Codes.

(Security right in revolving stock-in-trade – security ownership – enterprise charge – actio Pauliana)

A, a financial institution, intends to make a loan to B, who is starting a business as a wholesaler of motorcar accessories. To avoid personal liability, B sets up a private limited company (C). A wishes to take a security right over the stock that will be present on C's premises. The nature of the business is such that the stock will continuously be sold and replaced. A does not, therefore, wish its security right to be confined to present stock; rather it wishes it to include the stock that will be purchased by C in the future.

Questions

1. (a) Is such an arrangement possible? Describe its main features and prerequisites, including any requirements that may exist as to form, registration, separate storage, etc.

2. (b) What rights would such an arrangement confer on the secured party (A) in the event of C's insolvency? Or if another (unsecured) creditor tried to execute against the stock?

3. (c) How common are arrangements of this kind in business practice?

4. (d) Are there any limits in respect of the value the collateral may have in relation to the amount of the secured loan?

(Finance leasing – lessor's and lessee's rights in insolvency of the other partner – effects of purchase option)

S is a supplier of computers. B wants a computer. At the request of B, A (a financial institution) buys the computer from S. A then leases the computer to B. The length of the lease corresponds to the expected useful life of the computer. An unsecured creditor of B executes against the computer. Alternatively, B becomes bankrupt. A asserts ownership of, or a security right in, the computer, or at least to preferential payment out of the proceeds of the sale of the computer.

Questions

1. (a) Does A have any real rights in the computer? Do such rights depend on any further prerequisites?

2. (b) Is it relevant whether B has an option to buy the computer at the end of the contractual term?

3. (c) Is this or some other kind of leasing agreement used instead of other types of security, such as retention of title or security transfer of ownership? Is legislative policy or the approach of the courts more favourable to leasing (in respect of the interests of the supplier/the bank) than to security rights?

4. (d) What would B's legal position be in respect of the computer if not he but A became bankrupt?