Legal provisions of COM(2018)96 - Law applicable to the third-party effects of assignments of claims

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dossier COM(2018)96 - Law applicable to the third-party effects of assignments of claims.
document COM(2018)96 EN
date March 12, 2018

Contents

CHAPTER I - SCOPE AND DEFINITIONS


Article 1

Scope

1. This Regulation shall apply, in situations involving a conflict of laws, to the third-party effects of assignments of claims in civil and commercial matters.

It shall not apply, in particular, to revenue, customs or administrative matters.

2. The following shall be excluded from the scope of this Regulation:

(a)

(b)

(c)

assignment of claims arising from family relationships and relationships deemed by the law applicable to such relationships to have comparable effects, including maintenance obligations;

assignment of claims arising from matrimonial property regimes, property regimes of relationships deemed by the law applicable to such relationships to have comparable effects to marriage, and wills and succession;

assignment of claims arising from bills of exchange, cheques and promissory notes and other negotiable instruments to the extent that the obligations under such other negotiable instruments arise out of their negotiable character;

(d)         assignment of claims arising from questions governed by the law of companies and other bodies, corporate or unincorporated, such as the creation, by registration or otherwise, legal capacity, internal organisation or winding-up of companies and other bodies, corporate or unincorporated, and the personal liability of officers and members as such for the obligations of the company or body;

(e)          assignment of claims arising from the constitution of trusts and the relationship between settlors, trustees and beneficiaries;

(f)         assignment of claims arising from life insurance contracts arising out of operations

carried out by organisations other than undertakings referred to in Article 2(1) and (3) of Directive 2009/138/EC on the taking-up and pursuit of the business of Insurance and Reinsurance (Solvency II)49 the object of which is to provide benefits for employed or self-employed persons belonging to an undertaking or group of undertakings, or to a trade or group of trades, in the event of death or survival or of discontinuance or curtailment of activity, or of sickness related to work or accidents at work.

Article 2

Definitions

For the purposes of this Regulation:

(a)          ‘assignor’ means a person who transfers his right to claim a debt against a debtor to another person;

(b)         ‘assignee’ means a person who obtains the right to claim a debt against a debtor from another person;

(c)          ‘assignment’ means a voluntary transfer of a right to claim a debt against a debtor. It includes outright transfers of claims, contractual subrogation, transfers of claims by way of security and pledges or other security rights over claims;

(d)         ‘claim’ means the right to claim a debt of whatever nature, whether monetary or non-monetary, and whether arising from a contractual or a non-contractual obligation;

(e)          third-party effects means proprietary effects, that is, the right of the assignee to assert his legal title over a claim assigned to him towards other assignees or beneficiaries of the same or functionally equivalent claim, creditors of the assignor and other third parties;

(f)          ‘habitual residence’ means, for companies and other bodies, corporate or unincorporated, the place of central administration; for a natural person acting in the course of his business activity, his principal place of business;

(g)         ‘credit institution’ means an undertaking as defined in point (1) of Article 4(1) of Regulation (EU) No 575/201350, including branches, within the meaning of point (17) of Article 4(1) of that Regulation, of credit institutions having their head offices inside or, in accordance with Article 47 of Directive 2013/36/EU51, outside the Union where such branches are located in the Union;

(h)        ‘cash’ means money credited to an account in a credit institution in any currency;

49

50

Directive 2009/138/EC of the European Parliament and of the Council of 25 November 2009 on the

taking-up and pursuit of the business of Insurance and Reinsurance (Solvency II), OJ L 335,

17.12.2009, p. 1–155.

Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on

prudential requirements for credit institutions and investment firms and amending Regulation (EU) No

648/2012, OJ L 176, 27.6.2013, p. 1-337.

Directive 2013/36/EU of the European Parliament and of the Council of 26 June 2013 on access to the

activity of credit institutions and the prudential supervision of credit institutions and investment firms,

amending Directive 2002/87/EC and repealing Directives 2006/48/EC and 2006/49/EC, OJ L 176,

51

(i)         ‘financial instrument’ means those instruments specified in Section C of Annex I of

Directive 2014/65/EU52.

CHAPTER II - UNIFORM RULES


Article 3

Universal application

Any law specified by this Regulation shall be applied whether or not it is the law of a Member State.

Article 4

Applicable law

1. Unless otherwise provided for in this Article, the third-party effects of an assignment of claims shall be governed by the law of the country in which the assignor has its habitual residence at the material time.

Where the assignor has changed its habitual residence between two assignments of the same claim to different assignees, the priority of the right of an assignee over the right of another assignee shall be governed by the law of the habitual residence of the assignor at the time of the assignment which first became effective against third parties under the law designated as applicable pursuant to the first subparagraph.

2. The law applicable to the assigned claim shall govern the third-party effects of the assignment of:

(a)          cash credited to an account in a credit institution;

(b)         claims arising from a financial instrument.

3. The assignor and the assignee may choose the law applicable to the assigned claim as the law applicable to the third-party effects of an assignment of claims in view of a securitisation.

The choice of law shall be made expressly in the assignment contract or by a separate agreement. The substantive and formal validity of the act whereby the choice of law was made shall be governed by the chosen law.

4. A priority conflict between assignees of the same claim where the third-party effects of one of the assignments are governed by the law of the country in which the assignor has its habitual residence and the third-party effects of other assignments are governed by the law of the assigned claim shall be governed by the law applicable to the third-party effects of the assignment of the claim which first became effective against third parties under its applicable law.

Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU, OJ L 173,

52

Article 5

Scope of the applicable law

The law applicable to the third-party effects of assignment of claims pursuant to this Regulation shall govern, in particular:

(a)       the requirements to ensure the effectiveness of the assignment against third parties other than the debtor, such as registration or publication formalities;

(b)       the priority of the rights of the assignee over the rights of another assignee of the same claim;

(c)       the priority of the rights of the assignee over the rights of the assignor’s creditors;

(d)       the priority of the rights of the assignee over the rights of the beneficiary of a transfer of contract in respect of the same claim;

the priority of the rights of the assignee over the rights of the beneficiary of a novation of contract against the debtor in respect of the equivalent claim.

(e)

Article 6

Overriding mandatory provisions

1. Nothing in this Regulation shall restrict the application of the overriding mandatory provisions of the law of the forum.

2. Overriding mandatory provisions are provisions the respect for which is regarded as crucial by a Member State for safeguarding its public interests, such as its political, social or economic organisation, to such an extent that they are applicable to any situation falling within their scope, irrespective of the law otherwise applicable to the third-party effects of assignments of claims pursuant to this Regulation.

CHAPTER III - OTHER PROVISIONS


Article 7

Public policy (ordre public)

The application of a provision of the law of any country specified by this Regulation may be refused only if such application is manifestly incompatible with the public policy (ordre public) of the forum.

Article 8

Exclusion of renvoi

The application of the law of any State specified by this Regulation means the application of the rules of law in force in that State other than its rules of private international law.

Article 9

States with more than one legal system

1. Where a State comprises several territorial units, each of which has its own rules of law in respect of the third-party effects of assignments of claims, each territorial unit shall be considered as a State for the purposes of identifying the law applicable under this Regulation.

2. A Member State which comprises several territorial units each of which has its own rules of law in respect of the third-party effects of assignments of claims shall not be required to apply this Regulation to conflicts of laws arising between such units only.

Article 10

Relationship with other provisions of Union law

This Regulation shall not prejudice the application of provisions of Union law which, in relation to particular matters, lay down conflict of laws rules relating to the third-party effects of assignments of claims.

Article 11

Relationship with existing international conventions

1. This Regulation shall not prejudice the application of international conventions to which one or more Member States are parties at the time when this Regulation is adopted and which lay down conflict of laws rules relating to the third-party effects of assignments of claims.

2. However, this Regulation shall, as between Member States, take precedence over conventions concluded exclusively between two or more of them in so far as such conventions concern matters governed by this Regulation.

Article 12

List of Conventions

1. By [date of application], Member States shall notify the Commission of the conventions referred to in Article 11(1). After that date, Member States shall notify the Commission of all denunciations of such conventions.

2. Within six months of receipt of the notifications referred to in paragraph 1, the Commission shall publish in the Official Journal of the European Union:

(a)        a list of the conventions referred to in paragraph 1;

(b)       the denunciations referred to in paragraph 1.

Article 13

Review clause

By [five years after the date of application], the Commission shall submit to the European Parliament, the Council and the European Economic and Social Committee a report on the application of this Regulation. If appropriate, the report shall be accompanied by proposals to amend this Regulation.

Article 14

Application in time

1. This Regulation shall apply to assignments of claims concluded on or after [date of application].

2. The law applicable pursuant to this Regulation shall determine whether the rights of a third party in respect of a claim assigned after the date of application of this Regulation have priority over the rights of another third person acquired before this Regulation becomes applicable.

Article 15

Entry into force and date of application

This Regulation shall enter into force on the twentieth day following that of its publication in the Official Journal of the European Union.

It shall apply from [18 months from date of entry into force].

This Regulation shall be binding in its entirety and directly applicable in the Member States in accordance with the Treaties.