The assignment of future claims in EU private international law

Abstract

This article analyzes the assignment of future claims in EU private international law. The effectiveness of such an assignment depends on several conflict rules: those governing the existence of the claims, those governing the transfer of future claims and, in case the assignor becomes bankrupt, those governing the insolvency proceedings. In national situations, these laws operate in harmony, but in international situations, this is not always the case. Since multiple conflict rules govern the assignment of future claims and the effectiveness of their assignment against the insolvent estate, multiple substantive laws can apply at the same time. Differences in these laws may cause incongruencies, leading to unintended outcomes: an assignment that would not be effective against the insolvent estate in a domestic situation, may nevertheless be effective in an international one.

This article analyses how and when these unintended outcomes of the assignment of future claims should be prevented. To that end, it reviews the substantive laws of a number of Member States and discusses three examples of unintended outcomes. Each of these unintended outcomes can be prevented trough adaptation, which may be used to render the assignment ineffective against the insolvent estate of the bankrupt assignor. However, this might have a significant effect on the position and legal certainty of the assignee. Hence, the mechanism of adaptation should not be used lightly. As a main rule, an assignment should only be rendered ineffective against the insolvent estate if all the involved jurisdictions intend it to be ineffective.