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DRAFT REPORT (COM(2018)0096 – C80109/2018 – 2018/0044(COD))

On the proposal for a regulation of the European Parliament and of the Council on the law applicable to the third party effects of assignments of claims

JURI-PR-621985

Committee on Legal Affairs · Rapporteur: Pavel Svoboda

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The Committee on Legal Affairs draft report sets out Parliament's first-reading position on the proposed regulation on the law applicable to the third-party effects of assignments of claims. It keeps the law of the assignor's habitual residence as the main rule, but fixes it at the time of the conclusion of the assignment contract. It excludes the debtor and assignments made in collective insolvency proceedings from the scope, and defines third-party effects as proprietary effects. For securitisation, the assignor and assignee may choose the law applicable to the largest number of assigned claims to apply to all assignments of claims. It adds rules on priority conflicts between assignees and on overriding mandatory provisions of the law of the Member State of performance.

Committee position. The rapporteur proposes to keep the law of the assignor's habitual residence as the main rule, explicitly exclude debtors and insolvency proceedings from scope, and allow parties to a securitisation to choose the law applicable to the largest number of claims for all claims.

Key points

  1. The regulation would govern the third-party effects of assignments of claims in civil and commercial matters, excluding third-party effects to the debtor of the assigned claim.
  2. Assignments of claims made in the course of a collective proceeding under Regulation (EU) 2015/848 would be excluded from the regulation's scope.
  3. 'Third-party effects' would mean proprietary effects: the assignee's right to assert legal title towards other assignees or beneficiaries, creditors of the assignor and other third parties, excluding the debtor.
  4. The definition of 'cash' as money credited to an account in a credit institution would be deleted.
  5. The third-party effects of an assignment would be governed by the law of the country where the assignor has its habitual residence at the time of the conclusion of the assignment contract.
  6. Where the assignor changes habitual residence between two assignments of the same claim, priority would be governed by the law of the assignor's habitual residence at the time of the assignment that first became effective against other third parties.
  7. The law applicable to the assigned claim would govern the third-party effects of assignments of money credited to an account in a credit institution.
  8. For assignments for the purpose of securitisation, the assignor and assignee may choose that the law applicable to the largest number of assigned claims applies to all assignments of claims.
  9. A priority conflict between assignees where one assignment is governed by the law of the assignor's habitual residence and others by the law of the assigned claim would be governed by the law applicable to the assignment that first became effective against other third parties.
  10. Effect would be given to overriding mandatory provisions of the law of the Member State where the assignment has to be or has been performed, insofar as they render performance of the assignment contract unlawful.
  11. The law applicable under the regulation would determine the rights of respective assignees in competing claims based on assignments concluded after the date of application of the regulation.

Who is affected

  • Assignors and assignees of claims, who would be bound by the law of the assignor's habitual residence at the time of the assignment contract.
  • Debtors of assigned claims, who are excluded from the regulation's third-party effects rules.
  • Parties to securitisation, who may choose the law applicable to the largest number of assigned claims for all assignments.
  • Creditors of the assignor and other third parties, whose rights are addressed by the priority rules.
  • Member States where an assignment is performed, whose overriding mandatory provisions may be given effect.

Legal basis: Article 294(2) and Article 81(2) of the Treaty on the Functioning of the European Union