Advanced

Perfection of liens - is a reform from pledge to filing preferable?

Lund Kirkhoff, Jonatan LU (2010) JURM01 20101
Department of Law
Abstract
The current Swedish rules regarding perfection of liens is fragmented. The system has only undergone partial reform and even then only because of extreme necessity. The U.S. had a security interest system that in many parts were very similar to the system that today is present in Sweden. A reform took place as a response to the fact that the system finally reached the level of intolerable complexity; thus arose UCC Article 9.

Article 9 offers a security interest system that is uniform in a manner that it unifies all the different devices that de facto create security interests, it also extends to more than liens. One of its many benefits is that it allows the use of almost all personal property as collateral in a credit transaction. As... (More)
The current Swedish rules regarding perfection of liens is fragmented. The system has only undergone partial reform and even then only because of extreme necessity. The U.S. had a security interest system that in many parts were very similar to the system that today is present in Sweden. A reform took place as a response to the fact that the system finally reached the level of intolerable complexity; thus arose UCC Article 9.

Article 9 offers a security interest system that is uniform in a manner that it unifies all the different devices that de facto create security interests, it also extends to more than liens. One of its many benefits is that it allows the use of almost all personal property as collateral in a credit transaction. As the reader will beware of, it differentiates between a security interest’s validity inter partes and its validity against third parties. For a security interest to achieve validity inter partes, it is in most cases required that the parties have signed a security agreement, that the creditor gives value to the debtor and that the debtor has rights in the goods which become subject to the lien. Attachment is the terminology used to describe that the security interest has reached such validity. Validity against third parties requires fulfillment of the first three requirements, but also an additional step is necessary, perfection. The dominant perfection method within the UCC Article 9 is perfection via filing in a centralized filing system. This method is however supplemented with pledge, control, automatic perfection and sometimes a requirement of filing in other specific filing registers.

The Swedish system does not differentiate between attachment and perfection in manner equivalent to the differentiation that occurs within the UCC Article 9. Perfection is instead achieved by the use of pledge, notification, filing and different special considerations such as the applicability of the Sale of Chattels Act and the use of transactions classified as conditional sales. The lack of adequate perfection instruments within the Swedish system must therefore be considered as one of its deficiencies and thus creativity has been necessary to create adequate security instruments. Pledge is the predominant perfection method in Sweden, the fundamental key to achieve a valid pledge is that the pledgor has lost control of the collateral. The loss of control does not have to be absolute, and its definition and requirements have given rise to very complex considerations for Swedish courts.

The use of filing, as within the UCC Article 9, will offer a better perfection method in the manner that it offers a method that better reflects the needs and reality of the commercial market. Filing also fulfills the key purposes that have been seen to legitimize the existence of pledge to an extent that is far more generous and protective of third party interests. Conclusively, reform with a uniform system with filing as the predominant perfection method would create a more beneficial credit market climate. (Less)
Abstract (Swedish)
De nuvarande svenska reglerna avseende sakrätt i panträtt är utspridda i olika författningar, vilka tidigare endast har reformerats vid extrem nödvändighet. USA hade tidigare ett regelverk för säkerhetsrätter som i många avseenden var väldigt likvärdigt det regelverk som idag finns i Sverige. Som ett svar på det faktum att de amerikanska reglerna hade uppnått en nivå av otolererbar komplexitet genomfördes en genomgripande reform, vilket resulterade i UCC Artikel 9.

Artikel 9 erbjuder ett enhetligt säkerhetsrättsligt system på så vis att det samlar alla de olika instrument vars funktion, de facto, skapar en säkerhetsrätt. Ett system har skapats som omfattar inte enbart panträtter utan även andra instrument faller under Artikel 9. En av... (More)
De nuvarande svenska reglerna avseende sakrätt i panträtt är utspridda i olika författningar, vilka tidigare endast har reformerats vid extrem nödvändighet. USA hade tidigare ett regelverk för säkerhetsrätter som i många avseenden var väldigt likvärdigt det regelverk som idag finns i Sverige. Som ett svar på det faktum att de amerikanska reglerna hade uppnått en nivå av otolererbar komplexitet genomfördes en genomgripande reform, vilket resulterade i UCC Artikel 9.

Artikel 9 erbjuder ett enhetligt säkerhetsrättsligt system på så vis att det samlar alla de olika instrument vars funktion, de facto, skapar en säkerhetsrätt. Ett system har skapats som omfattar inte enbart panträtter utan även andra instrument faller under Artikel 9. En av de många fördelar med detta system är att nästan all lös egendom tillåts vara pant i en kredittransaktion. Artikel 9, vilket läsaren kommer att bli varse om, skiljer mellan en säkerhetsrätts giltighet inter partes och dess giltighet gentemot tredje man. För att giltighet ska uppnås inter partes är det i de flesta fall erfordrat att parterna har undertecknat ett säkerhetsavtal, att borgenären överlåter värde till gäldenären samt att gäldenären äger rättigheter i den egendom som är underkastad panträtt. Attachment, är den använda terminologin för att beskriva det faktum att säkerhetsrätten har uppnått giltighet inter partes. Giltighet gentemot tredje man kräver förutom giltighet inter partes, att ytterligare ett krav är uppfyllt, ett sakrättsmoment. Det dominerande sakrättsmomentet i UCC Artikel 9 är registrering i ett centraliserat register. Detta sakrättsmoment kompletteras av tradition, kontroll, automatiskt uppkommen sakrätt samt i vissa fall, registrering i andra specifika register.

Det svenska systemet särskiljer inte mellan giltighet mellan parterna och giltighet gentemot tredje man på samma sätt som UCC Artikel 9. Sakrätt uppnås istället genom tradition, denuntiation, registrering och i vissa fall via användandet av speciella instrument såsom lösöreköplagen och äganderättsförbehåll. Bristen på adekvata sakrättsmoment får anses vara ett av det svenska systemets defekter. Kreativitet har följaktligen varit en nödvändighet för att tillskapa adekvata säkerhetsrättsliga instrument. Tradition är det dominerande sakrättsmomentet. Det fundamentala momentet för att åstadkomma en giltig tradition är att gäldenären har förlorat sin rådighet över den pantsatta egendomen. Rådighetsavskärandet behöver dock inte vara absolut och innebörden av kravet har på så vis givit upphov till väldigt komplexa ställningstaganden av svenska domstolar. Användandet av registrering i ett centraliserat register, såsom i UCC Artikel 9, kommer att utgöra ett bättre sakrättsmoment på så vis att det är en metod som bättre reflekterar behoven och verkligheten på den kommersiella marknaden. Registering uppfyller också de syften som givit legitimitet åt tradition, i en utsträckning som är mer långtgående och beskyddande av tredje mans intresset. En reformation till ett enhetligt system med registrering som det dominerande sakrättsmomentet, kommer slutligen troligtvis leda till ett förmånsrikare kreditklimat. (Less)
Please use this url to cite or link to this publication:
author
Lund Kirkhoff, Jonatan LU
supervisor
organization
course
JURM01 20101
year
type
H3 - Professional qualifications (4 Years - )
subject
keywords
Förmögenhetsrätt, Kredit- och säkerhetsrätt
language
English
id
1628226
date added to LUP
2010-07-15 11:10:39
date last changed
2010-07-15 11:10:39
@misc{1628226,
  abstract     = {The current Swedish rules regarding perfection of liens is fragmented. The system has only undergone partial reform and even then only because of extreme necessity. The U.S. had a security interest system that in many parts were very similar to the system that today is present in Sweden. A reform took place as a response to the fact that the system finally reached the level of intolerable complexity; thus arose UCC Article 9. 

Article 9 offers a security interest system that is uniform in a manner that it unifies all the different devices that de facto create security interests, it also extends to more than liens. One of its many benefits is that it allows the use of almost all personal property as collateral in a credit transaction. As the reader will beware of, it differentiates between a security interest’s validity inter partes and its validity against third parties. For a security interest to achieve validity inter partes, it is in most cases required that the parties have signed a security agreement, that the creditor gives value to the debtor and that the debtor has rights in the goods which become subject to the lien. Attachment is the terminology used to describe that the security interest has reached such validity. Validity against third parties requires fulfillment of the first three requirements, but also an additional step is necessary, perfection. The dominant perfection method within the UCC Article 9 is perfection via filing in a centralized filing system. This method is however supplemented with pledge, control, automatic perfection and sometimes a requirement of filing in other specific filing registers.

The Swedish system does not differentiate between attachment and perfection in manner equivalent to the differentiation that occurs within the UCC Article 9. Perfection is instead achieved by the use of pledge, notification, filing and different special considerations such as the applicability of the Sale of Chattels Act and the use of transactions classified as conditional sales. The lack of adequate perfection instruments within the Swedish system must therefore be considered as one of its deficiencies and thus creativity has been necessary to create adequate security instruments. Pledge is the predominant perfection method in Sweden, the fundamental key to achieve a valid pledge is that the pledgor has lost control of the collateral. The loss of control does not have to be absolute, and its definition and requirements have given rise to very complex considerations for Swedish courts. 

The use of filing, as within the UCC Article 9, will offer a better perfection method in the manner that it offers a method that better reflects the needs and reality of the commercial market. Filing also fulfills the key purposes that have been seen to legitimize the existence of pledge to an extent that is far more generous and protective of third party interests. Conclusively, reform with a uniform system with filing as the predominant perfection method would create a more beneficial credit market climate.},
  author       = {Lund Kirkhoff, Jonatan},
  keyword      = {Förmögenhetsrätt,Kredit- och säkerhetsrätt},
  language     = {eng},
  note         = {Student Paper},
  title        = {Perfection of liens - is a reform from pledge to filing preferable?},
  year         = {2010},
}