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SECURITY ASSIGNMENT OF DEBTS AND THE CONFLICT OF LAWS

Lloyd's Maritime and Commercial Law Quarterly

SECURITY ASSIGNMENT OF DEBTS AND THE CONFLICT OF LAWS

Anders Møllmann *

This paper considers the lack of harmonisation in the EU regarding conflict of laws rules in relation to what are normally referred to as the proprietary aspects of assignment. The issue is relevant because the Commission is to consider possible amendments to the Rome I Regulation in this respect. In this context, the paper discusses the shortcomings of using a “property versus contract” discourse and stresses the importance of focusing instead on the factual situations that the rule is intended to regulate.

1. Introduction

In modern trade and business, assignment of debts as security is an important way of financing transactions or obtaining credit. When the assignment involves an international dimension, difficult questions of a private international law character arise. The problems are partly a result of the fact that in assignment situations a triangular relationship is created between the debtor of the assigned debt, the assignor (creditor of the assigned debt), and the assignee;1 and this is based on (at least) two contracts:2 one regarding the assigned debt and one regarding the assignment. Of further importance, however, is the fact that most of the problems that arise fall within the grey area in the overlaps between contract and property.

2. The typical problems in international assignments

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