The law should provide that the following matters are governed by the law of the State whose law governs an assigned receivable, a transferred negotiable instrument or a transferred negotiable document

It was pointed out that, while contractual assignability would be subject to a single law (i.e. the law governing the assigned receivable), legal assignability would be subject to different laws depending on the country in which the debtor had its place of business.

Legally, she had the right. Legally, she signed it over to us

Attorney and Conveyancer, Supreme Court of South Africa, 1967 1995.

The law should provide that a security right in a negotiable document and the goods represented thereby is subject to the rights under the law governing negotiable documents of a person to whom the negotiable document has been duly negotiated.

quot (3) The priority between an assignee and the effectiveness of an assignment as against the assignor apos s creditors is governed by the law of the country in which the assignor has its place of business. quot

The data registered shall include the legal name and address of the assignor and the assignee and a brief description of the assigned receivables.

Law applicable to the mutual rights and obligations of the assignor and the assignee

Page Article 26. Law applicable to the rights and obligations of the assignor and the assignee 56 64 16

In response, it was noted that paragraph (1) was the result of a compromise between those legal systems that invalidated the assignment and those legal systems that invalidated anti assignment clauses.

2. In the absence of a choice of law by the assignor and the assignee, their mutual rights and obligations arising from their agreement are governed by the law of the State with which the contract of assignment is most closely connected.

It was observed that, for the suggested language to provide the desirable degree of certainty, it would need to be supplemented by a conflict of laws rule specifying the law applicable to statutory prohibitions of assignment (or legal assignability).

The suggestion was made that in paragraph (5) reference should be made to quot the assignor quot and not to quot the legal name of the assignor quot .

(1) With the exception of matters which are settled in this Convention, the effectiveness validity of an assignment as between the assignor and the assignee and the mutual rights and obligations of the assignor and the assignee are governed by the law expressly chosen by the assignor and the assignee.

The discussion next focused on whether priority among several assignees of the same receivables from the same assignor should be governed by the law determined in accordance with paragraph (1) of article 28 quot , i.e., by the law governing the receivable to which the assignment relates or by the law of the country in which the assignor has its place of business .

quot (2) The priority between an assignee and the effectiveness of an assignment as against the insolvency administrator is governed by the law governing insolvency of the country in which the assignor has its place of business .

(2) In the absence of a valid choice, the effectiveness validity of an assignment as between the assignor and the assignee and the mutual rights of the assignor and the assignee are governed by the law of the country in which the assignor has its place of business the country with which the contract of assignment is most closely connected .

1. The law of the State in which the assignor is located governs the priority of the right of an assignee in the assigned receivable over the right of a competing claimant.

The form of the assignment and the effect of any non compliance with such form is governed by the law of the country of the assignor s place of business.

Few laws prohibit categorically any assignment of the concession, while other laws authorize such an assignment, subject to approval by the host Government, which may also be required for a transfer of the right to control the project company.

After discussion, the Working Group decided that the law applicable to the rights and obligations of the assignee and the debtor should be the law governing the assigned receivable.

quot (1) The priority among several assignees obtaining the same receivables from the same assignor is governed by the law governing the receivable to which the assignment relates of the country in which the assignor has its place of business .

With regard to conflicts of priority between the assignee and the assignor apos s creditors, the suggestion was made that they should be governed by the law of the country in which the assignor had its place of business.

quot (5) Any defect, irregularity, omission or error with regard to the legal name of the assignor that results in data registered not being found upon a search based on the legal name of the assignor renders the registration ineffective. quot

Another function, it was said, that Chapter VI could fulfill was to provide an additional layer of harmonization of law in the field of assignment by supplying the rules to be followed by courts of Contracting States in identifying in any given case the law applicable to an assignment.

While it might be desirable for the law chosen by the parties to govern also, for example, transfer of property in the receivable as between the assignor and the assignee, it was a matter of debate whether issues such as assignability of a receivable and time of transfer might appropriately be governed by the law chosen by the parties.

It was generally agreed that the law governing the receivable to which the assignment related was preferable.

In addition, it was noted that the main outstanding issues included effects of the assignment on third parties, i.e. creditors of the assignor and the administrator in the insolvency of the assignor, as well as scope and conflict of laws issues.

quot (1) Unless otherwise provided by law or by agreement between the assignor and the assignee, any personal or property rights securing payment of the assigned receivables are transferred to the assignee without a new act of transfer.

quot 3. If a receivable is transferred by operation of law, the beneficiary of that transfer has priority over an assignee asserting a contract of assignment of an earlier date.

The law should provide that failure of the assignor to perform the original contract does not entitle the account debtor to recover from the assignee a sum paid by the account debtor to the assignor or the assignee.

(b) As part of the sale or change in the ownership or legal status of the business out of which the assigned receivables arose.

After discussion, the Working Group decided that the law chosen by the parties under paragraph (1) should apply to both the assignment contract and the proprietary effects of the assignment.

Furthermore, in practice, it was not uncommon for different laws to govern the validity of the assignment (or the assignability of a receivable), on the one hand, and the contractual relationship between the assignor and the assignee on the other hand.

In addition, it was said that the last assignee who had obtained a domestic receivable through a domestic assignment would have to examine all the previous assignments in order to determine which law governed the last assignment.

Illicit transfer of arms

Various options mentioned for the identification of the assignor included the legal name of the assignor and a registration number the use of which could help overcome language problems.

As a result, in a bulk assignment involving receivables owed by debtors located in different countries, the assignee would have to look at the law of the country of each debtor in order to determine whether there were any legal limitations of the assignment.

As to conflicts between the assignee and the administrator in the insolvency of the assignor, the suggestion was made that they should also be governed by the law of the country in which the assignor had its place of business.

After discussion, the Working Group decided that paragraph (1) should be revised to provide that competing rights of the assignee and the assignor apos s creditors should be governed by the law of the country in which the assignor had its place of business.

5. The report of UNCITRAL on the work of its thirtieth session (A 52 17) met with the general approval of his delegation, which would follow with interest the preparation of a legislative guide on build operate transfer (BOT) projects and of a uniform law on assignment in receivables financing.

In addition, it was pointed out that such a rule did not create difficulties in practice, since it was not unusual for the assignor and the assignee to specify in the assignment the law governing the receivable so as to avoid that the assignee would need to examine the transaction under which the assigned receivable might arise.

2. The rules of the law of either the forum State or any other State that are mandatory irrespective of the law otherwise applicable may not prevent the application of a provision of the law of the State in which the assignor is located.

For example, a conflict of priority among several assignees obtaining the same receivables from the same assignor, or the assignment to a syndicate of assignees, would be subject to a different legal regime, depending on the country in which the assignees would be located.

In order to address that concern, it was suggested that reference should be made instead to the law of the assignor apos s place of business.