The Portuguese Presidency of the Council of the European Union has presented a new compromise proposal on the issue of secured claims, in an attempt to unblock the discussions on the Regulation which aims at remedying the lack of clarity concerning the law applicable to the effectiveness of assignments of claims in a cross-border transaction (see EUROPE 11979/1).
The problem is always the same: the proposal deals with the third-party effects of assignment of claims, but not with the effects of the transfer of the security rights, which are governed by national conflict rules. Several options to resolve this issue have already been discussed but there is still no consensus among Member States.
Lisbon had, in fact, not succeeded with the compromise it presented on 22 February in an EU Council working group (see EUROPE 12659/12). The suggested solution, which is an intermediate solution between the two avenues already explored (see EUROPE 12516/9), has raised “strong objections”.
The new compromise, dated 2 March and copied to EUROPE, this time explores a third avenue, namely an exclusion from scope, the exact extent of which is still under discussion.
In essence, from the discussions, it has resulted that it is consensual among delegations that this Regulation does not govern the transfer of security rights over assets other than claims, explains the Presidency. It thus proposes to expressly exclude from the scope of the regulation the third-party effects of the transfer of security rights over immoveable property or a registered moveable asset.
Consequently, an assignee who wants to acquire title over this type of secured claim will have to comply, as is the case today, with two laws: - the law applicable under the regulation to acquire title over the assigned claim; - and the law applicable under national conflict rules to acquire title over the security right.
If a priority conflict arises between two assignees of the claim secured by a right over immoveable property or a registered moveable asset in which one of the assignees has acquired title over both the assigned claim under the law designated by the regulation and the security right under the law designated by national conflict rules, and the other assignee has only acquired title over the assigned claim under the law designated by the regulation, each Member State court will apply its own national conflict rules to resolve the priority conflict, and that contradictory decisions could, in some cases, be handed down, it says.
The compromise proposal was discussed, on Tuesday 9 March, in the EU Council’s working party on civil law matters.
See the document: http://bit.ly/3rx32gT (Original version in French by Marion Fontana)