Areas of Practice
5th Mar 2020
In C-548/18 BNP Paribas v TeamBank (issued on 9/10/2019), the CJEU considered whether Rome I Regulation designates the applicable law with regard to the third-party effects of an assignment of a claim in case of multiple assignments, for the purpose of determining the holder of that claim.
The factual matrix is readily recognisable: a debtor indebted to multiple creditors, assigns to each of them his salary and pension rights (collectively for the purposes of this article, the “salary claims”). TeamBank, a German Bank, was the first creditor to which the salary claims were assigned. The employer was not notified of the assignment. The second creditor to which salary claims were assigned, was a Luxembourg bank which informed the debtor’s employer as it was obliged to do under Luxembourg law.
The legal question was the following:
Can Article 14 Rome I Regulation be interpreted as determining the applicable law with regard to the third-party effects of an assignment of a claim in the case of multiple assignments, for the purpose of determining the holder of that claim? Or should its silence on same be interpreted as having been intentional (excluding such cover, leaving it to residual national conflicts rules).
The court observed that the wording of Article 14 of the Rome I Regulation does not refer to the third-party effects of an assignment of a claim.
Therefore, under EU law as it currently stands, the absence of rules of conflict expressly governing the third-party effects of assignments of claims is a choice of the EU legislature. Residual rules take over.
In a parallel development, on 12 March 2018, the European Commission published a proposal for a new EU regulation on the law applicable to the third-party effects of assignments of claims (COM(2018) 96 final). This proposal follows on from the Commission’s 2015 Action Plan on Building a Capital Markets Union (CMU) and the 2017 CMU Mid-Term Review.
This is a positive development since the approaches in determining the applicable law to third-party effects of cross-border assignments in the national laws of the EU Member States differ to a great extent.
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