RETENTION OF TITLE IN THE EUROPEAN UNION: IS THERE
POSSIBILITY FOR HARMONIZATION
Ines Medić
Private International Law Chair, Faculty of Law, University in Split, Domovinskog rata 8, 21000 Split, Croatia
Mia Grgić
Private International Law Chair, Faculty of Law, University in Split, Domovinskog rata 8, 21000 Split, Croatia
DOI: https://doi.org/10.31410/limen.2018.24
4th International Scientific – Business Conference LIMEN 2018 – Leadership & Management: Integrated Politics of Research and Innovations, Belgrade – Serbia, December 13, 2018, CONFERENCE PROCEEDINGS published by: Association of Economists and Managers of the Balkans, Belgrade, Serbia; Faculty of Engineering Management – Belgrade, Serbia; Modern Business School – Belgrade, Serbia; Faculty of Business and Management Sciences – Novo Mesto, Slovenia; Faculty of Business Management and Informatics – Novo Mesto, Slovenia; Business Academy Smilevski – BAS, Skopje, Macedonia; BAS Institute of Management, Bitola, Macedonia, ISBN 978-86-80194-15-8
Abstract
Although there are 28 national jurisdictions in the European Union, due to the extensive process of harmonization their national rules in public domain have much in common. Private law area, on the other hand, remains mainly unaffected by this process, especially in the area of property law.
Retention of title clause is one of the most important tools for protection of the seller’s rights under the sales contract, but it arises from the nucleus of property law. It means, among other things, that it remains heavily influenced by local legal tradition. As such it can be one of the obstacles for the free movement of goods and services.
Having this in mind it is of no surprise that for the last three decades the EU has been trying to come up with the European notion of the retention of title clause. Different advantages as well as disadvantages of the cross-border relations in the area of contract law with the implications on the property law would best be met by the autonomous notion of this clause.
Despite the obvious willingness of the EU in regulating the subject matter, question remains whether the EU competences include this area. What about article 295 of the EC Treaty which seems to prevent the EU from legislative actions in the area of property law? What about numerous clauses?
Also, it may be argued that this issue has already been dealt with on the level of UNIDROIT as well as UNCITRAL, with not much success. Thus, the intention of the authors is to explore reasons for the failure of the attempted unification at global level and to explain how common European retention of title clause could lead to more secure and more certain transactions within the internal market.
Retention of title clause is one of the most important tools for protection of the seller’s rights under the sales contract, but it arises from the nucleus of property law. It means, among other things, that it remains heavily influenced by local legal tradition. As such it can be one of the obstacles for the free movement of goods and services.
Having this in mind it is of no surprise that for the last three decades the EU has been trying to come up with the European notion of the retention of title clause. Different advantages as well as disadvantages of the cross-border relations in the area of contract law with the implications on the property law would best be met by the autonomous notion of this clause.
Despite the obvious willingness of the EU in regulating the subject matter, question remains whether the EU competences include this area. What about article 295 of the EC Treaty which seems to prevent the EU from legislative actions in the area of property law? What about numerous clauses?
Also, it may be argued that this issue has already been dealt with on the level of UNIDROIT as well as UNCITRAL, with not much success. Thus, the intention of the authors is to explore reasons for the failure of the attempted unification at global level and to explain how common European retention of title clause could lead to more secure and more certain transactions within the internal market.
Key words
Retention of title, European Union, harmonization, property law
References
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Nebengesetzen, Einführungsgesetz zum Bürgerlichen Gestzbuche/IPR, Internationale
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Common Rule?“, in: Akkermans, B./Ramaekers,E. (eds.): Property Law Perspectives,
Antwerp: Intersentia, 2014, p. 123.
[3] Bouček, V.: Načelo lex rei sitae u međunarodno privatnom pravu i temeljne slobode iz
Ugovora o EZ u stvarnopravnim odnosima s prekograničnim obilježjem, in: Gliha, I. (ed.):
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(2003), p. 121- 139.
[5] O’Connor, E. (ed.): Retention of title: A practical guide to the legislation in 37 countries,
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[6] Romac, A.: Rimsko pravo, Narodne novine, Zagreb, 1992.
[7] Case: C-302/05, Commission v Italy.
[8] Directive 2011/7/EU of the European parliament and of the Council of 16 February 2011
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[9] Regulation (EU) 2015/848 of the European Parliament and of the Council of 20 May 2015
on insolvency proceedings (recast), OJ EU L 141/19.
[10] UNCITRAL Legislative Guide on Secured Transactions, United Nations, New York,
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[11] European reforms of retention of title rights: progressing towards modern international
trade law? available at: www.uncitral.org. Retrieved: 21.12.2018.
[12] Povlakić, M.: Zadržanje prava vlasništva kao efikasno sredstvo osiguranja vjerovnika u
zemljama nastalim disolucijom SFRJ (Republika Hrvatska, Republika Slovenija, BiH),
Zbornik Pravnog fakulteta Sveučilišta u Rijeci, Rijeka, 2003.
[13] Bürgerliches Gesetzbuch-BGB, art. 449., Official Gazette BGBl. I 2002 S. 42, 2909, I 2003
S. 738.
[14] von Metzler, K.: Retention of title in German law, International Business Lawyer, 1994.
[15] Insolvenzordnung, Official Gazette BGBl. I 2017 S.654.
[16] Civil Code, Official Gazette No. 79 and 79 bis.
[17] Court of Cassation No. 6322/2006.
[18] Dialty, F.: Regulating retention of title in Europe, Eurofenix, 2010.
[19] Court of Cassation 2099/1987, 14891/2002. [20] Bankruptcy Act, Royal Decree of 16th March 1942, No. 267.
[21] Rottnauer, Achim, E.: Die Mobiliarkreditsicherheiten unter besonderer Berücksichtigung
der besitzlosen Pfandrechte im deutschen un englischen Recht, Berlin, 1992.
[22] Case Aluminium Industrie Vaasen B.V. v Romalpa Aluminium, 1976, 1 WLR 676.
[23] Mitchell, J.: Retention of Title Clauses: A Key to the Romalpa Maze, 4 Legal Issues J. 77,
2016.
[24] Case Armour v Thyssen Edelstahlwerke, 1991, 2 AC 339.
[25] Maguire, B.: Retention of Title in 1990s: The Dissolving of Romalpa Continues, 16 Dublin
U.L.J. 40, 1994.
[26] https://www.insolvencydirect.bis.gov.uk/casehelpmanual/R/RetentionOfTitle.htm.
Retrived: 27.12.2018.
[27] Case Procureur du Roi v. Dassonville [1974] ECR 837.
[28] Case 120/78 Cassis de Dijon [1979] ECR 00649.
[29] Akkermans, B.: Predicting the future of European Property Law, available at:
https://ssrn.com/abstract=2885489 , p. 7.
[30] Case 350/92 Kingdom of Spain v. Council of the European Union [1995] ECR I-01985,
para. 35.
[31] Wållgren, M.: Exploring the Outer Limits of Article 114 TFEU – Towards the general
power? An analysis of non-market objectives and „measures having as their object the
establishment and functioning of the internal market“, Master’s Thesis in European Union
Law, Uppsala Universitet, 2016, pp. 5-6, 24-25.
[32] Case C-376/98 Germany v. Parliament and Council (Tobacco Advertising I) [2000] ECR
I-8419, Case C-434/02 Arnold André GmbH & Co. KG v. Landrat des Kreises Herford
[2004] ECR I-11825, Case C-380/03 Federal Republic of Germany v. European
Parliament and Council of the EU (Tobacco Advertising II) [2006] ECR I-11573, Case C-
58/08 Vodafone and Others [2010] ECR I-04999.
[33] Case 24/67 Parke, Davis & Co. P. Pröbel and Others [1968] ESE 00055, Case 78/70
Deutsche Grammophon Gesellschaft mbH v Metro-SB-Großmärkte GmbH & Co.
KG., ECLI:EU:C:1971:42, Joined cases 15/74 and 16/74 Centrafarm BV and Adriaan de
Peijper v Sterling Drug Inc. [1974] ECR 01147, Case 182/83 Fearon & Company Limited
v Irish Land Commission [1984] ECR 03677, Case C-235/89 Commission v. Republic of
Italy [1992] ECR I-00777, Case C-30/90 Commission v. The United Kingdom of Great
Britain and Northern Ireland [1992] ECR I-00829, etc.
[34] Mataczyńsky, M.: What Did the European Community Founders Actually Mean by Saying
That the Treaties Shall in No Way Prejudice the Rules in Member States Governing the
System of Property Ownership? Analysis of Article 345 TFEU, available at:
https://pressto.amu.edu.pl/index.php/ppuam/article/view/4587.
[35] Akkermanns, B./Ramaekers, E.: Article 345 TFEU (ex. 295 EC), Its Meaning and
Interpretations, European Law Journal, 2010, pp. 292-314.
[36] Joined Cases C-105/12, C-106/12 & C-107/12 Staat der Nederlanden v. Essent NV and
Others [2013] ECR 677.
[37] Directive 2004/48/EC of the European Parliament and of the Council of 29 April 2004 on
the enforcement of intellectual property rights, 2004, OJ L 157.
[38] Council Directive 93/7EEC on the return of cultural objects unlawfully removed from the
territory of a member state, 1993, OJ L 74.
[39] Council Directive 2002/47/EC of the European Parliament and of the Council of 6 June
2002 on financial collateral arrangements, 2002, OJ L 168.
[40] Regulation (EU) No 650/2012 (Succession Regulation), 2012, OJ EU L 201; Regulation
(EU) 2016/1103 (Matrimonial Property Regulation), 2016, OJ EU L 183; Regulation (EU)
2016/1104 (Marital Property of Registered Partners), 2016, OJ EU L 183.[41] McCormack, G.: Retention of Title and the EC Late Payment Directive, 1 J. Corp. L. Stud.
501 (2001), pp. 501-518.
[42] Fritz, D.F.: Harmonization of Insolvency Law at EU level: Avoidance actions and rules on
contract, European Parliament, 2011.
[43] Virgos, M./Garcimartinn, F.: The European Insolvency Regulation: Law and Practice,
Kluwer Law International, 2004.
[44] Available at: https://www.uncitral.org/uncitral/uncitral_texts/insolvency/2004Guide.html.
[45] Francesca Fiorentini: European Law of Security Rights over Movable Assets: Patterns and
Perspectives, in: Habdas, M./Wudarsk, A.: Festschrift für Stanislałwa Kalus, Ius est ars
boní et aequi, Peter Lang GmbH, Frankfurt am Main, 2010.
Nebengesetzen, Einführungsgesetz zum Bürgerlichen Gestzbuche/IPR, Internationale
Sachenrecht, Berlin, 1996, p. 17.
[2] Akkermans, B./Ramaekers,E.: „Lex Rei Sitae in Perspective: National Developments of a
Common Rule?“, in: Akkermans, B./Ramaekers,E. (eds.): Property Law Perspectives,
Antwerp: Intersentia, 2014, p. 123.
[3] Bouček, V.: Načelo lex rei sitae u međunarodno privatnom pravu i temeljne slobode iz
Ugovora o EZ u stvarnopravnim odnosima s prekograničnim obilježjem, in: Gliha, I. (ed.):
Liber Amicorum Nikola Gavella, Pravni fakultet Sveučilišta u Zagrebu, 2008, p. 869.
[4] Milo, J.M.: Retention of Title in European Business Transactions, 43 Washburn L.J 121
(2003), p. 121- 139.
[5] O’Connor, E. (ed.): Retention of title: A practical guide to the legislation in 37 countries,
International Chamber of Commerce, Paris, 2018.
[6] Romac, A.: Rimsko pravo, Narodne novine, Zagreb, 1992.
[7] Case: C-302/05, Commission v Italy.
[8] Directive 2011/7/EU of the European parliament and of the Council of 16 February 2011
on combating late payment in commercial transactions, OJ EU L 48/1.
[9] Regulation (EU) 2015/848 of the European Parliament and of the Council of 20 May 2015
on insolvency proceedings (recast), OJ EU L 141/19.
[10] UNCITRAL Legislative Guide on Secured Transactions, United Nations, New York,
2010.
[11] European reforms of retention of title rights: progressing towards modern international
trade law? available at: www.uncitral.org. Retrieved: 21.12.2018.
[12] Povlakić, M.: Zadržanje prava vlasništva kao efikasno sredstvo osiguranja vjerovnika u
zemljama nastalim disolucijom SFRJ (Republika Hrvatska, Republika Slovenija, BiH),
Zbornik Pravnog fakulteta Sveučilišta u Rijeci, Rijeka, 2003.
[13] Bürgerliches Gesetzbuch-BGB, art. 449., Official Gazette BGBl. I 2002 S. 42, 2909, I 2003
S. 738.
[14] von Metzler, K.: Retention of title in German law, International Business Lawyer, 1994.
[15] Insolvenzordnung, Official Gazette BGBl. I 2017 S.654.
[16] Civil Code, Official Gazette No. 79 and 79 bis.
[17] Court of Cassation No. 6322/2006.
[18] Dialty, F.: Regulating retention of title in Europe, Eurofenix, 2010.
[19] Court of Cassation 2099/1987, 14891/2002. [20] Bankruptcy Act, Royal Decree of 16th March 1942, No. 267.
[21] Rottnauer, Achim, E.: Die Mobiliarkreditsicherheiten unter besonderer Berücksichtigung
der besitzlosen Pfandrechte im deutschen un englischen Recht, Berlin, 1992.
[22] Case Aluminium Industrie Vaasen B.V. v Romalpa Aluminium, 1976, 1 WLR 676.
[23] Mitchell, J.: Retention of Title Clauses: A Key to the Romalpa Maze, 4 Legal Issues J. 77,
2016.
[24] Case Armour v Thyssen Edelstahlwerke, 1991, 2 AC 339.
[25] Maguire, B.: Retention of Title in 1990s: The Dissolving of Romalpa Continues, 16 Dublin
U.L.J. 40, 1994.
[26] https://www.insolvencydirect.bis.gov.uk/casehelpmanual/R/RetentionOfTitle.htm.
Retrived: 27.12.2018.
[27] Case Procureur du Roi v. Dassonville [1974] ECR 837.
[28] Case 120/78 Cassis de Dijon [1979] ECR 00649.
[29] Akkermans, B.: Predicting the future of European Property Law, available at:
https://ssrn.com/abstract=2885489 , p. 7.
[30] Case 350/92 Kingdom of Spain v. Council of the European Union [1995] ECR I-01985,
para. 35.
[31] Wållgren, M.: Exploring the Outer Limits of Article 114 TFEU – Towards the general
power? An analysis of non-market objectives and „measures having as their object the
establishment and functioning of the internal market“, Master’s Thesis in European Union
Law, Uppsala Universitet, 2016, pp. 5-6, 24-25.
[32] Case C-376/98 Germany v. Parliament and Council (Tobacco Advertising I) [2000] ECR
I-8419, Case C-434/02 Arnold André GmbH & Co. KG v. Landrat des Kreises Herford
[2004] ECR I-11825, Case C-380/03 Federal Republic of Germany v. European
Parliament and Council of the EU (Tobacco Advertising II) [2006] ECR I-11573, Case C-
58/08 Vodafone and Others [2010] ECR I-04999.
[33] Case 24/67 Parke, Davis & Co. P. Pröbel and Others [1968] ESE 00055, Case 78/70
Deutsche Grammophon Gesellschaft mbH v Metro-SB-Großmärkte GmbH & Co.
KG., ECLI:EU:C:1971:42, Joined cases 15/74 and 16/74 Centrafarm BV and Adriaan de
Peijper v Sterling Drug Inc. [1974] ECR 01147, Case 182/83 Fearon & Company Limited
v Irish Land Commission [1984] ECR 03677, Case C-235/89 Commission v. Republic of
Italy [1992] ECR I-00777, Case C-30/90 Commission v. The United Kingdom of Great
Britain and Northern Ireland [1992] ECR I-00829, etc.
[34] Mataczyńsky, M.: What Did the European Community Founders Actually Mean by Saying
That the Treaties Shall in No Way Prejudice the Rules in Member States Governing the
System of Property Ownership? Analysis of Article 345 TFEU, available at:
https://pressto.amu.edu.pl/index.php/ppuam/article/view/4587.
[35] Akkermanns, B./Ramaekers, E.: Article 345 TFEU (ex. 295 EC), Its Meaning and
Interpretations, European Law Journal, 2010, pp. 292-314.
[36] Joined Cases C-105/12, C-106/12 & C-107/12 Staat der Nederlanden v. Essent NV and
Others [2013] ECR 677.
[37] Directive 2004/48/EC of the European Parliament and of the Council of 29 April 2004 on
the enforcement of intellectual property rights, 2004, OJ L 157.
[38] Council Directive 93/7EEC on the return of cultural objects unlawfully removed from the
territory of a member state, 1993, OJ L 74.
[39] Council Directive 2002/47/EC of the European Parliament and of the Council of 6 June
2002 on financial collateral arrangements, 2002, OJ L 168.
[40] Regulation (EU) No 650/2012 (Succession Regulation), 2012, OJ EU L 201; Regulation
(EU) 2016/1103 (Matrimonial Property Regulation), 2016, OJ EU L 183; Regulation (EU)
2016/1104 (Marital Property of Registered Partners), 2016, OJ EU L 183.[41] McCormack, G.: Retention of Title and the EC Late Payment Directive, 1 J. Corp. L. Stud.
501 (2001), pp. 501-518.
[42] Fritz, D.F.: Harmonization of Insolvency Law at EU level: Avoidance actions and rules on
contract, European Parliament, 2011.
[43] Virgos, M./Garcimartinn, F.: The European Insolvency Regulation: Law and Practice,
Kluwer Law International, 2004.
[44] Available at: https://www.uncitral.org/uncitral/uncitral_texts/insolvency/2004Guide.html.
[45] Francesca Fiorentini: European Law of Security Rights over Movable Assets: Patterns and
Perspectives, in: Habdas, M./Wudarsk, A.: Festschrift für Stanislałwa Kalus, Ius est ars
boní et aequi, Peter Lang GmbH, Frankfurt am Main, 2010.
