The Priority Rules of the United Nations Receivables Convention

I. INTRODUCTION In his comprehensive summary of the provisions of the United Nations Convention on the Assignment of Receivables in International Trade (1) (the Convention), Spiros Bazinas (2) points out correctly that one of the significant features of the Convention is to make subject to the law of the assignor any priority conflict between the assignee of a receivable and third parties claiming an interest in the same receivable, including a trustee in the bankruptcy of the assignor. (3) The policy decision to turn away from more traditional approaches represents significant progress in the development of international commercial law and the harmonization of conflict-of-laws rules in the area of secured transactions. This comment will analyze the reasons for the adoption of this rule at the international level, as well as its practical implications. The first section explains why any priority contest between competing claimants of the same receivable must be governed by a single law. The second section reviews the advantages and disadvantages of the solution retained by the Convention, namely, that the law applicable to priorities shall be that of the location of the assignor. (4) Finally, the third section examines how the conflict rule of the Convention would operate under certain scenarios likely to occur in commercial transactions. Under the Convention, a person who transfers or creates a over a receivable is called the assignor. The transferee or holder of the is the assignee. The debtor is the person who owes payment of the receivable. (5) Under the U.S. Uniform Commercial Code (U.C.C.) and the Canadian Personal Property Security Acts, the corresponding terms are debtor (instead of assignor), secured party (instead of assignee), and account debtor (instead of debtor). (6) This comment employs the terms assignor, assignee, and debtor, attaching to such words their respective meaning under the Convention. Likewise, the expression security is used herein to describe the North American concept of interest. The term in the Convention refers to a sovereign state or country. However, if a state has two or more territorial units in which different systems of law are applicable in relation to certain matters, any reference in the Convention to the law of that state means, with respect to such matters, the law in force in the applicable territorial unit. (7) II. A SINGLE GOVERNING LAW FOR PRIORITIES A lender who provides credit on the of receivables needs to ensure that its will be enforceable against third parties. The commercial value of a right depends on whether the holder of the right will be entitled to priority against competing claimants, such as another secured creditor, an unsecured creditor, a purchaser of the collateral, or a trustee in the bankruptcy of the borrower. The same need exists where receivables are financed through a sale to a factor or under a securitization program. Indeed, many legal systems contain specific provisions intended to solve a priority contest among several persons claiming an interest in the same receivable. (8) The absence of rules in this regard deters the use of receivables as collateral. The problem is compounded in an international transaction where there is uncertainty as to which law would apply to settle a potential conflict of priority between several persons purporting to have a right to the receivable. The Convention therefore is a milestone in the development of international commercial law, as it permits an easy determination of the body of rules to be used to solve priority conflicts. Any conflict involving an international assignment or an international receivable would be resolved by referring to one single law, namely the law of the location of the assignor. (9) This is a significant achievement for two main reasons. First, the private international law rules of many states do not provide clear guidance or have given rise to controversies as to the law governing a priority contest in relation to receivables. …

Récupéré en direct depuis OpenAlex et désinversé. Les résumés ne sont pas conservés dans cette base de données : les index inversés représentent 8,6 Go des 9,3 Go de texte de la base, et le serveur dispose de 13 Go libres.