bluuebunny/crossref_metadata_2025 huggingface dataset:
Financial Regulation in Commercial Disputes
Authors: Walker George , Purves Robert , Blair Michael
Published: July 2018

This chapter examines the causes of action available to investors through the civil courts to resolve disputes with financial services firms. Under the Financial Services and Markets Act 2000 (FSMA), persons in their capacity as an investor have a range of statutory protections, for example where an investor has cause for complaint against a firm as to the very wisdom of entering into an agreement for a particular financial product. Complaints may be resolved through the Financial Ombudsman Service or, where the firm is impecunious, referred to the Financial Services Compensation Scheme. Alternatively, an investor may seek a remedy through the civil courts. The chapter considers the relevant provisions of Part 1 (Statutory Causes of Action) and Part 2 (Causes of Action in Common Law) of FSMA, focusing on the right of the investor to claim for breach of contract, tort of negligence, misrepresentation, and breach of fiduciary duty.
The Law of Security and Title-Based Financing
Authors: Beale Hugh , Bridge M G , Gullifer Louise , Lomnicka Eva
Published: July 2018

Personal property security is an important subject in commercial practice as it is the key to much of the law of banking and sale. This book examines traditional methods of securing debts (such as mortgages, charges, and pledges) on property other than land, describing how these are created, how they must be registered (or otherwise ‘perfected’) if they are to be valid, the rights and duties of the parties, and how the security is enforced if the debt is not paid. This third edition has been updated to cover the wealth of case law, including new cases on control of financial collateral, and relief against forfeiture under a financial collateral arrangement; on retention of title (including the effect of ‘extended’ clauses); estoppel and the HPI register; availability of set-off against assignee; a number of cases on enforcement of security; equitable liens; solicitor’s liens and databases; on priority or purchase money security interests; and the Irish Supreme Court decision on floating charge and crystallization. There have also been significant legislative changes, which are discussed in detail, most notably the 2013 amendments to Companies Act 2006 Part 25, and Cape Town Convention. The book covers traditional security over personal property and also devices that fulfil a similar economic function, such as retention of title and sales of receivables.
Use of security and quasi-security interests in debt financing
Authors: Beale Hugh , Bridge M G , Gullifer Louise , Lomnicka Eva
Published: July 2018

This chapter explains how security and quasi-security interests can be used wherever a party who is owed an obligation wishes to have a proprietary claim over an asset of the obligor, to which it can have recourse if that obligation is not fulfilled. They are used widely in the context of debt financing of businesses, to secure borrowing and other forms of finance extended by banks and other financial institutions. They are also used to secure credit extended to businesses by those contracting with them, in any situation where a business does not have to pay immediately for benefits conferred on it by the counterparty, and also where a business may become liable to a counterparty in the future.
Possessory Security
Authors: Beale Hugh , Bridge M G , Gullifer Louise , Lomnicka Eva
Published: July 2018

This chapter explores the nature of pledge. It is a common law security interest created by delivery of tangible property to the pledgee as security for the payment of a debt or performance of another obligation. It confers on the pledgee not only the right to possession of the pledged assets but the right of sale on default and the right to sub-pledge without destroying the pledge. As it is a security interest, the pledgor has the right to redeem the pledged assets by repaying the debt or performing the obligation secured, and the pledgee is obliged to account for any surplus arising on the sale of the pledged assets over and above the amount required to discharge the secured obligation.
Introduction to Priorities
Authors: Beale Hugh , Bridge M G , Gullifer Louise , Lomnicka Eva
Published: July 2018

This chapter provides a discourse of the nemo dat rule as the general priority rule, followed by discussions of the exceptions to that general rule. Nemo dat quod non habet is the general priority rule in relation to all interests, whether absolute or by way of security. Fully translated as ‘no one can give what they do not have’, the effect of the rule is that as between two interests, the one first in time has priority. The chapter, however, only considers priority between two or more security interests and priority between security interests and absolute interests. The only discussion of priority between absolute interests is where absolute interests are used as financing devices, either by means of the transfer or the retention of title.
Authorized Dispositions
Authors: Beale Hugh , Bridge M G , Gullifer Louise , Lomnicka Eva
Published: July 2018

This chapter examines the situation where A disposes of assets in which B has an absolute or security interest to a third party C. The disposition may be absolute or by way of security. Normally, in this situation, the priority rules would determine whether B or C has priority. However, where the disposition is made with the consent or permission of B, then C will always take free from B’s interest. Similarly, where a third party takes an interest in an asset subject to a security interest and the grant is made with the authority or consent of the secured lender, the third party will take free from that security interest. The extent of the authority or consent may be made clear in advance in the security agreement or may be given at the time of the grant of the interest.
Enforcement of True Security Interests
Authors: Beale Hugh , Bridge M G , Gullifer Louise , Lomnicka Eva
Published: July 2018

This chapter explains how a number of general issues arise in connection with the enforcement of true security interests that will be taken before particular enforcement issues are dealt with under the relevant head. True security interests consist of the four nominate types of security recognized in English law, namely, the three consensual securities of pledge, mortgage, and charge, together with the non-consensual lien. The obligation of a secured party to account for any surplus obtained is implicit in the nature of security. In the case of a pledge, this is consistent with the pledgor’s residual property rights. This obligation is also consistent in the case of mortgages. Charges and mortgages may be taken together, given that they are assimilated in drafting practice and in judicial treatment as alike in recognizing the borrower’s equity of redemption.
Enforcement of Rights not including the Transfer of Title
Authors: Beale Hugh , Bridge M G , Gullifer Louise , Lomnicka Eva
Published: July 2018

This chapter talks about the enforcement of rights in the case of quasi-security, which, apart from not being true security, does not involve the enforcement of a proprietary right. Non-consensual examples are few and far between. A former example of such a right was a landlord’s right, under section 6 of the Law of Distress (Amendment) Act 1908, to direct a sub-tenent to pay subrents directly to him in the event of a tenant’s failure to pay the rent. The landlord’s right was the equivalent of serving a third-party enforcement (formerly garnishee) order without having to go to court to procure the order. The only surviving example of a non-consensual right, it seems, is set-off.
Upstream Oil and Gas Disputes
Authors: Tevendale Craig , Bakstad Samantha
Published: July 2018

This chapter focuses on Joint Operating Agreements (JOAs). A JOA is an agreement between two or more companies which defines their respective rights and obligations in the exploration of a hydrocarbon project. The purpose of the JOA is for the participating companies to share risks (costs) and rewards (revenues) in relation to the project, and to define their respective roles. Among other things, the chapter discusses leading model form JOAs, as well as the interpretation and application of clauses typically found in JOAs, such as exculpatory or liability limitation clauses, pre-emption clauses, and clauses dealing with the consequences of a party's default or forfeiture. It also analyzes case law from various jurisdictions regarding implied or statutory obligations, such as duties of ‘good and fair dealing’ and fiduciary duties amongst the partners.
Gas Supply Transactions and Disputes
Authors: Finizio Steven , Howe Michael
Published: July 2018

This chapter first describes the main transactions that occur in relation to the supply of natural gas after its exploration. In particular, it studies contracts relating to: the production of gas (including drilling contracts), the processing of gas, the transportation of gas (including in pipelines and as liquefied natural gas (LNG) by ship), the storage of gas, the sale of gas from producers to wholesalers, and the sale of gas from wholesalers to end users. The chapter then discusses disputes that typically arise in relation to those transactions, including transportation infrastructure disputes and storage disputes. It pays particular attention to disputes relating to long-term gas sale and purchase agreements (GSPAs), an important number of which have led to high-profile arbitration proceedings in recent years. The chapter, therefore, analyzes in detail the clauses typically contained in those agreements, and the issues that typically arise in arbitration — in particular, gas price reviews.
Energy Construction and Infrastructure Disputes
Authors: Rees Peter , Connors Jess
Published: July 2018

This chapter discusses the types of disputes which commonly arise in relation to energy and infrastructure construction projects. In terms of physical subject matter — that is, what is being built — this encompasses a wide range of structures, both onshore and offshore. The chapter describes the types of energy and infrastructure construction projects covered here. Moreover, it shows that, despite the variety of problems which can arise in disputes, there are common pressure points in projects which give rise to similar issues. Therefore, the chapter identifies some of the standard form contracts which are used (often in an adapted form) in these types of projects. Next, the chapter considers — from an English law perspective — some of the types of clauses which commonly feature in energy and infrastructure construction contracts.
Mining Disputes
Authors: Heffron Raphael J
Published: July 2018

This chapter looks at recurring questions relating to the mining of natural resources (including coal, uranium, iron ore, and titanium, to name a few) which are important for energy projects around the globe. Despite its long history — international commercial mining activity has been common since the early 1800s — the mining sector has never established its own legal framework or mining-specific international law. Hence, the chapter discusses how mining-related laws, regulations, and disputes are the cross-road of conflicting, and sometimes contradicting, drivers: economics, politics, and environmental protection. It also describes several mechanisms aimed at preventing disputes, and recurrent issues in the mining sector: these include environmental impact assessments, social licences to operate, so-called ‘clean-up obligations’, and increased transparency obligations. Finally, this chapter applies the concept of ‘energy justice’ to disputes in the mining sector.
ECT and European Union Law
Authors: Bermann George A
Published: July 2018

This chapter also looks at issues that typically arise in Energy Charter Treaty (ECT) cases. In particular, it explores those cases in which respondent states have made use of EU law in mounting a jurisdictional or substantive defence under the ECT. First, regarding EU law as a jurisdictional defence, the chapter looks both at intra-European BIT cases and intra-European ECT cases. Regarding the latter, the chapter addresses, among other things, the critical question of whether the ECT is applicable to disputes between an EU member state and a national of another EU member state, or whether such application is precluded by an implicit ‘disconnection clause’ under the ECT, as argued by the EU Commission. Second, regarding EU law as a substantive defence, the chapter analyzes scenarios in which EU law arguably requires conduct, on the part of a member state, that the ECT itself forbids, or vice versa.
ECT and Renewable Energy Disputes
Authors: Gallagher Norah
Published: July 2018

This chapter discusses the Energy Charter Treaty (ECT) and renewable energy disputes in more detail. It begins with an overview of the framework of national and international regulations in the renewable energy sector. Next, the chapter looks at a recent series of ECT cases filed by investors in the renewable (predominantly solar) energy sector against Bulgaria, the Czech Republic, Italy, and Spain. The chapter compares this recent wave of arbitrations in the renewables sector with the first arbitration award rendered under the ECT, which also concerned incentives to encourage investments for cleaner energy. It concludes with reflections on whether Italy's decision to withdraw from the ECT was influenced by these most recent cases filed against it.
Energy Investor-State Disputes in Asia
Authors: Yen Koh Swee
Published: July 2018

This chapter takes a critical view on some energy-related investor-state disputes in Asia which have ‘left a bitter taste in the Host State's mouth’. Using selected case studies, the chapter concludes that some Asian countries, who once saw agreeing to investor-state arbitration as a means to attract investment, are nowadays more reticent towards this type of dispute resolution. The chapter discusses how to revive investor-state arbitration in Asia. In particular, it considers investor-state arbitration against the backdrop of recent growth in outward Asian investment. It emphasizes the importance of regional and international energy cooperation and initiatives such as the Association of South-East Asian Nations (ASEAN) Comprehensive Investment Agreement.
Energy Investor-State Disputes in Africa
Authors: Mbengue Makane Moïse , Sagar Samarth
Published: July 2018

This chapter analyzes some of Africa's regulation in the energy sector, including national legislation in Kenya and Mozambique. The energy sector is particularly important on the African continent, which is replete with traditional energy resources such as oil, gas, and coal — and has recently been seeing a growing emphasis on renewable sources of energy. Historically, the African energy sector has been dominated by the petroleum industry, and to a large extent this is still true today. The chapter looks at the legal instruments relating to investors' rights in Africa and dispute resolution mechanisms therein, distinguishing treaties, municipal legislation, and contracts. The chapter concludes that a major trend of resource nationalism exists on the African continent.
International Boundary Disputes and Natural Resources
Authors: Miles Wendy
Published: July 2018

This chapter deals with international boundary disputes and natural resources. After providing an historical context to modern boundaries, the chapter describes how climate change directly impacts land, food, and water access because of increased extreme weather conditions. Thus, climate change can threaten peace and security in fragile regions due to conflicts over diminishing inhabitable territory and natural resources. The chapter assesses how international boundary disputes can be affected by changing demands for oil (eg in Kurdistan and South Sudan), and for renewable energy resources (eg the ownership, use, and control of rivers crossing multiple borders). It also reflects on a more global scope the effects that climate change-related migration has on the modern understanding of international borders.
Climate Disputes and Sustainable Development in the Energy Sector
Authors: Magnusson Annette
Published: July 2018

This chapter provides an overview of energy-related sustainability objectives. It also provides a list of instruments aimed at their enforcement. Today, not many avenues are available to use international arbitration to enforce sustainability objectives. The chapter analyzes whether and how international arbitration can offer support for desirable developments towards meeting sustainable energy needs for the future by encouraging new instruments and other innovations. It also acknowledges the importance of what might be called ‘indirect’ enforcement of sustainability objectives, via legal instruments other than those defining the sustainability objectives as such (eg commercial arbitration enforcing the construction of a solar energy plant).
Multinational Military Operations
Authors: Fleck Dieter , Newton Michael A , Grenfell Katarina
Published: July 2018

This chapter discusses the use of multinational military units. Some European States, such as Germany, have incorporated large, if not most, parts of their national military forces in permanent multinational units. Many other States including the US are forming ad hoc military units for specific operations. The UN, NATO, and other international organizations are pursuing standby arrangements and high readiness commitments to allow for rapid response. In all these situations command and control issues are to be considered. While there are many different forms of multinational military cooperation, and Sending States will avoid regulating these matters in status-of-forces agreements (SOFAs) with the Receiving State, they are nevertheless relevant for the law and practice of Visiting Forces. This chapter draws some conclusions on the concept of multinational military operations for the North Atlantic Alliance, the European Union, and beyond.
UN Peace Operations
Authors: Bothe Michael
Published: July 2018

This chapter examines the laws regarding UN operations for the maintenance or restoration of international peace and security involving military elements. UN peacekeeping forces are by necessity present on ‘foreign’ territory—a fact which renders peacekeeping forces comparable to traditional Visiting Forces. There are, however, a number of differences which distinguish peacekeeping forces from the usual type of Visiting Forces. The main difference is their international mandate as an instrumentality of the UN. Their task is either the prevention or the pacification of international armed conflicts by serving as buffers or observers, or the reestablishment of internal order in a country through a wide array of measures, in particular after the end of an internal conflict. This specific mandate must be reflected in one way or the other in the legal rules which regulate their status and their rights and duties.
The Immunity of Visiting Forces and their Headquarters
Authors: Fleck Dieter
Published: July 2018

This chapter discusses the principle of immunity. Immunity comprises an exemption from criminal, civil, and administrative jurisdiction of the Receiving State. For any foreign visiting force immunity is an essential prerequisite for the successful performance of its mission in the receiving state. This principle was first developed for warships visiting foreign harbours where they were not only treated with courtesy, but also held exempt from the Host State’s authority. Immunity of foreign Visiting Forces and their military headquarters in the Receiving State is furthermore an element of State immunity. This immunity is rooted in customary international law and exists even in the absence of a status-of-forces agreement (SOFA). Headquarters established by international organizations and their forces deployed in the Receiving State share the immunity of their organization.
General Overview
Authors: Fleck Dieter
Published: July 2018

This chapter provides an overview of the relevant issues of the UN Model SOFA and the NATO SOFA. Remarks on peace operations mainly focus on those conducted or authorized by the UN. They may, however, become relevant for peace operations conducted by other international organizations as well. Likewise, rules and provisions of the NATO SOFA may offer some food for thought when regulating military cooperation outside the North Atlantic Alliance. Hence, specific requirements notwithstanding, the chapter offers some legal considerations which may be helpful in other cases as well. It addresses these in context, thus explaining similarities and differences on the status of foreign Visiting Forces (jus in praesentia) from both practical experience and theoretical viewpoints.
Dependents
Authors: Hartov Mette Prassé
Published: July 2018

This chapter looks at the status provided to dependents under the NATO SOFA and supplementary agreements. The NATO SOFA definition identifies eligible dependents as the spouse of a member of a force or civilian component and children of a member of a force or civilian component when depending on their support. The principal definition excludes all other family members. To compensate for this, the definition has been broadened in supplementary agreements to both the NATO SOFA and to the Paris Protocol, as well as in national legislation. The common feature of these wider definitions is that factual dependents are included in the definition, i.e. persons/relatives who are dependent on the support of a member of the force or a member of a civilian component.
Permits and Licences
Authors: Conderman Paul J
Published: July 2018

This chapter explains issues regarding the operation of vehicles by military and accompanying personnel in a different country. As is the case with criminal jurisdiction, the question of authority to operate motor vehicles by these individuals was initially a question of the ‘Law of the Flag’. When forces brought military vehicles and equipment into a host country with its consent, they were deemed to be authorized to operate such motor vehicles and equipment for which they had been trained and certified by the Sending State. The stationing of large numbers of troops, civilian personnel, and accompanying family members in peacetime after the founding of the Atlantic Alliance also necessitated more detailed rules and regulations for driving and driving permits. This issue was dealt with in rather similar ways in both the UN Model SOFA and the NATO SOFA.
Vehicles
Authors: Conderman Paul J
Published: July 2018

This chapter addresses the issues that come with vehicle registration. The UN Model SOFA and NATO SOFA implicitly provide that service vehicles shall not be subject to registration by the Receiving State. Rather the Sending State—and in UN peace operations the UN Secretariat—bears responsibility for this. In addition, the NATO SOFA does not deal with the registration of private vehicles. The principle is therefore that of submission to the laws and regulations of the Receiving State. The question of insurance for service vehicles meanwhile is largely a moot one, as they are property of the Sending State, a self-insurer. The purpose of insurance is to compensate victims for damage and claims arising out of the operation of service vehicles in the performance of official duty.
Premises
Authors: Black-Branch Jonathan L
Published: July 2018

This chapter discusses the right to premises. The provisions dealing with premises in the UN and NATO SOFAs are both aimed at ensuring the Host State actually provides, or does its best to assist, the Sending State in acquiring the services and property necessary for carrying out the specific mission of the Visiting Forces. The models differ on the specific rights, powers, and duties of the Host State and the Sending State or organization as well as the jurisdiction of the Host State over the premises. The original purpose of NATO SOFA Art. IX was to make the services and property required to a force. On the other hand, the UN SOFA seems to lean more toward protecting the rights, safety, and operations of visiting UN forces.
Military Law Enforcement
Authors: Voetelink Joop
Published: July 2018

This chapter explores the enforcement jurisdiction of Sending States in international military cooperation and international (crisis management) operations. It analyses enforcement jurisdiction and the limits on extraterritorial exercise of that jurisdiction under international law in general and also briefly addresses the concept of international legal assistance in criminal matters that allows States to deal with transnational aspects of crimes outside the framework of military cooperation and operations. The chapter then explores the scope of jurisdictional provisions in status-of-forces agreements (SOFAs). Since extraterritorial enforcement powers of States are limited, SOFAs generally include a basic provision ensuring mutual legal assistance of the States involved in carrying out criminal and other investigations. This chapter also discusses the scope of these provisions and turns to some specific powers, such as the right to exercise police powers for the purpose of maintaining (internal) order and discipline.
Logistic Support
Authors: Llarena Eduardo Martinez
Published: July 2018

This chapter discusses logistic support arrangements. When properly orchestrated, logistics arrangements can be conceived as a decisive instrument of multinational warfare and champion the change from a military coalition to an alliance. Nevertheless, logistics is a low-profile discipline that only comes to light when it fails. In this regard, looking for market-oriented efficiencies should never result in a gap on strategic projection. It is by creating and sustaining superior performance that an organization will dilute costs due to a greater value of its overall activities. Very great attention is paid to short-term cash economy in detriment to long-range military planning benefits. Tactical logistics are well monitored: everyone understands the importance of not running out of fuel during combat and it is not difficult to flag the problem. On the other hand, strategic logistics and its implication on support arrangements are frequently neglected during peacetime.
Financing Operations
Authors: Chalanouli Nikoleta
Published: July 2018

This chapter provides an overview of the financial system that has been established regarding the financing of operations, mostly within a multinational framework. States have their own modalities for securing funding when entering into an operational framework. Simultaneously, States in the last century have seen the value in moving forward with multinational coalitions, at times formed with the modalities of international organizations. However, this development was not always foreseen by all international organizations; at times, some struggled to cover the needs of an operation. Moreover, while certain rules have been developed for the funding of approved operations within an international framework, the responsibilities and control that the Member States give over to the organization is also different from one organization to the next.
Legal Issues Related to International Military Headquarters
Authors: Hill Steven , Favuzza Federica
Published: July 2018

This chapter provides a general overview of the types of international military headquarters (IMHQs) and their legal nature. IMHQs encompass a wide range of structures that are in use in the contemporary practice of States and international organifzations. States tend to find them attractive options for a variety of reasons, including the promotion of cooperation and coordination and the expression of shared political and/or military commitments. They can also be an important tool to help States address resource constraints, including by taking advantage of efficiencies gained through specialization and economies of scale. IMHQs all share the common characteristic of being in one way or the other ‘international’. Their nature varies widely, including with respect to their mission and their composition and structure. Because of this diversity, the chapter only discusses selected legal issues that tend to arise in connection with IMHQ and will likely arise in the future.
The Japan Experience with Visiting Forces—An Evolving Perspective
Authors: Kawai Junya , Sonnenberg Dale L , Timm Donald A
Published: July 2018

This chapter considers Japan’s experience with visiting forces. Unlike the NATO experience in Europe, the United States and Japan had very different backgrounds and cultures. The long-term stationing of US forces in Japan is remarkable because despite the circumstances under which it began, it grew into a partnership of allies and equals. The US-Japan Security Treaty and its successor, and the agreements thereunder regarding the status of forces, as main instruments of the law of visiting forces in Japan have been utilized flexibly to meet the defence and security needs of Japan and the security needs of the United States from the standpoint of fulfilling its regional commitments and its global strategy. However, the application of these treaties and agreements has been influenced not only by military convenience, but also by the interest to achieve harmonization with everyday life of residents in Japan.
Visiting Forces in Korea
Authors: Kim Hyun , Timm Donald A
Published: July 2018

This chapter looks at the development of the law of visiting forces in Korea. This law begins in the aftermath of World War II, with the liberation of the Korean peninsula from Japanese occupation since 1910. However, the winding down of that war, the establishment of an interim civil authority, and the transition from that authority to the sovereign and autonomous Republic of Korea, were probably in and of themselves not that extraordinary from the worldwide perspective. The true beginning of the modern era of visiting forces—the primary focus of this chapter—came with the invasion of the fledgling Republic by forces of its co-inhabitant on the peninsula on 25 June 1950. This act resulted in an enforcement action by the UN, which ultimately saw the forces of sixteen member states deployed in Korea under the UN flag.
Afghanistan
Authors: Prescott Jody M , Male Jane M
Published: July 2018

This chapter turns to the case study of Afghanistan. It first examines the Bonn Agreement that marked the start of the creation of the new Afghan State, and the status and development of the multinational military organization that was created to provide the security conditions conducive to the new State taking root, the International Security Assistance Force (ISAF). Next, this chapter looks at the status and development of the parallel military mission undertaken by the US-led coalition, known as Operation Enduring Freedom (OEF), to fight against al-Qaeda. Because of the way in which the missions of ISAF and OEF became blurred together in very real senses as the war in Afghanistan wore on, this chapter considers the challenges posed to the effective operation of the two status-of-forces agreement (SOFA) regimes. It also looks at how these challenges impacted and informed the new agreements that became effective in 2015.
Russian Forces in the Former USSR and Beyond
Authors: Tuzmukhamedov Bakhtiyar
Published: July 2018

This chapter discusses legal grounds for, and actual deployments of, Russian forces outside of the Russian territory. Such deployments mostly continued in the former Soviet Union, with the exception of Estonia, Latvia, and Lithuania, from which forces had been withdrawn by and large by 31 August 1994. The only remaining Russian-operated installation in the Baltics, the early-warning radar and related facilities off the Latvian town of Skrunda, were decommissioned four years later. Other instances of Russian forces stationed outside the former USSR included a signals intelligence facility at Lourdes, Cuba, and the Cam Ranh navy and air base in Vietnam. The use of both was discontinued in 2002.
Introduction
Authors: Johnston William , Werlen Thomas , Link Frederick
Published: July 2018

This book discusses the law of set-off in thirty-four jurisdictions and the different approaches used to deal with the right of set-off where parties are solvent, where a party is insolvent and where parties operate across borders. Set-off refers to the right to reduce or fully discharge a monetary obligation owed by a debtor against a claim owed to the debtor such that only the balance remains. The right to set-off may arise due to a contractual arrangement between the parties or by the operation of law, including insolvency or bankruptcy laws. Set-off has emerged as an important tool in the negotiation of financial and commercial contracts and in dispute resolution. This introduction provides an overview of set-off, with a particular focus on set-off between solvent parties and set-off against insolvent parties. It also considers conflict of laws and cross-border issues arising in set-off against solvent parties and insolvent parties.
Belgium
Authors: Vermylen Marc
Published: July 2018

This chapter provides an overview of the law of set-off in Belgium. Set-off is a recognized legal concept in Belgian law and can occur in one of three ways: by operation of law (legal set-off), court order (judicial set-off), or agreement (contractual set-off). Under the Belgian Civil Code, set-off has been considered primarily not as a security technique but as a means of facilitating payments between two reciprocal debtors. After discussing the legal framework of set-off in Belgium, the chapter considers set-off between solvent parties. In particular, it explains legal set-off, judicial set-off, contractual set-off, and multilateral set-off. It then examines set-off in insolvency, taking into account legal set-off and contractual set-off against insolvent parties. Finally, it analyses isses arising in cross-border set-off.
Chile
Authors: Armas M Marcelo
Published: July 2018

This chapter examines the law of set-off in Chile, both before and after insolvency, as well as the alternatives for contractual set-off structures that may be agreed among two or more parties. In Chile, set-off was created as a legal concept primarily on the basis of practical considerations rather than juridical principles. The right to set-off may arise due to a contractual arrangement between the parties or by the operation of law, including the Chilean Civil Code. The chapter first considers set-off in Chile outside insolvency, focusing on set-off by operation of law and contractual set-off, before discussing set-off in insolvency. In particular, it explains the implications of a declaration of liquidation under Chilean Bankruptcy Law and its possible consequences for set-off rights. It also analyses issues arising in cross-border set-off.
China
Authors: Liew Chin-Chong , Zhou Ying
Published: July 2018

This chapter examines the applicability of the law of set-off in China in cases involving solvent parties and against a party subject to a bankruptcy proceeding. It first explains statutory set-off under the Chinese Contract Law and contractual set-off between solvent parties before discussing set-off against insolvent parties, focusing on the relevant provisions of the Bankruptcy Law and requirements for insolvency set-off. It also considers the procedures for exercising the right to insolvency set-off, set-off right in the context of close-out netting in cross-border over-the-counter (OTC) derivatives transactions, restrictions on unfair preference for creditors and set-off, restrictions on banks' set-off rights against deposits, and set-off vis-a-vis clearing houses. The chapter concludes with an analysis of cross-border issues arising in set-off between solvent parties and against insolvent parties.
Czech Republic
Authors: Schweigelová Dana
Published: July 2018

This chapter provides an overview of the legal framework of set-off in the Czech Republic both outside and within the context of insolvency. In the Czech Republic, set-off rights are regulated exclusively by statutory law. General regulations on set-off arrangements are laid down in Sections 1982–1991 of the Czech Civil Code. Other laws relevant to set-off are the Business Corporations Act, the Capital Markets Act, the Financial Collateral Act, and the Act on Insolvency. The chapter first examines set-off between solvent parties, taking into account general regulations, specific regulations under the Business Corporations Act, contractual set-off involving multiple parties, and special regulatory regimes governing set-off in the Czech Republic. It then considers set-off between insolvent parties before concluding with an analysis of set-off issues arising in the cross-border context.
Denmark
Authors: Rasmussen Kim
Published: July 2018

This chapter provides an overview of the legal framework of set-off in Denmark. Under Danish law, set-off may be claimed without prior agreement between the parties. Certain basic set-off requirements, founded on general principles regulating set-off rights, are firmly established in Denmark. The chapter begins with a discussion of set-off between solvent parties, focusing on set-off by operation of law, expanded set-off by operation of law (connected claims), expanded set-off rights by agreement, and limitations on the right to set-off. It then considers set-off against insolvent parties, taking into account the relevant provisions in the Bankruptcy Act as well as close-out netting. It also analyses the law applicable to set-off between solvent parties and set-off between insolvent parties in the context of cross-border transactions.
England
Authors: Tredgett Richard
Published: July 2018

This chapter provides an overview of the law of set-off in England and Wales, both prior to insolvency (whether by virtue of a contract or by operation of law) and in the event of a winding up or an administration of a company under English law. It begins with a discussion of set-off between solvent parties, focusing on contractual set-off, legal set-off, equitable set-off, and banker's right of set-off. It then considers set-off against insolvent parties, taking into account the relevant set-off rules, the mandatory nature of insolvency set-off, ‘due’ and contingent claims, mutuality of claims, and the rule on build-up of set-offs. It also examines insolvency clawbacks and concludes with an analysis of issues arising in cross-border set-off.
Finland
Authors: Wist Tarja
Published: July 2018

This chapter discusses the law of set-off in Finland. Under Finnish law, set-off between solvent parties may occur when there is a unilateral notice by either party to the other party (compulsory set-off) or when an agreement is reached between the parties. In the case of compulsory set-off, both the main receivable and counterclaim must be reciprocal, of the same kind, and valid, undisputed and due for payment. The chapter first provides an overview of set-off between solvent parties, focusing on compulsory set-off, contractual set-off, cash management, security interests, set-off in connection with transfer of receivables, and set-off in foreclosure. It then considers set-off against insolvent parties and concludes with an analysis of issues arising in the cross-border context.
France
Authors: Hubert Olivier
Published: July 2018

This chapter examines the law of set-off in France and how the country's bankruptcy law may affect the effectiveness of set-off. In France, set-off has been reaffirmed by specific rules regarding the netting of derivative products or by the EU Directive on Financial Collateral Arrangements (Collateral Directive). Other laws with relevant provisions for set-off include the French Civil Code and the French Monetary and Financial Code. The chapter first provides an overview of set-off between solvent parties, focusing on legal set-off, contractual set-off, enhanced set-off of financial obligations, cash-pooling arrangements, and security interests. It then considers set-off against insolvent parties, taking into account issues relating to automatic stay, fraudulent transfers/suspect period, and set-off of financial obligations after opening of an insolvency procedure. It also discusses the key set-off provisions of the Collateral Directive before concluding with an analysis of the law applicable to set-off in a cross-border context.
Ireland
Authors: Johnston William
Published: July 2018

This chapter discusses the law of set-off in Ireland. Under Irish laws, a set-off agreement serves as a mechanism for a lender to take effective security over a customer's account with it. Set-off may be considered a self-help remedy that prevents uncertainty when enforcing security against persons. The chapter first provides an overview of set-off between solvent parties, focusing on statutory set-off, contractual set-off, cash management (pooling) arrangements, and security interests. It then examines the effect of a mareva injunction on the validity of the right to set-off or security before proceeding with an analysis of set-off against insolvent parties. The rule against double proof is explored, along with set-off on winding-up, set-off in financial contracts, and financial collateral arrangements. The chapter concludes with an assessment of cross-border issues arising from the right of set-off.
Luxembourg
Authors: Wagner Henri
Published: July 2018

This chapter examines the most common features of set-off (compensation) in Luxembourg and how the rights of set-off are affected by insolvency proceedings. It first provides an overview of set-off between solvent parties and set-off against insolvent parties before discussing cross-border issues relating to right of set-off. In particular, it considers cross-border set-off between solvent parties in cases where the Rome I Regulation or the Rome Convention applies and in cases where neither one applies. It also explains cross-border set-off against insolvent parties, focusing on situations where the Insolvency Regulation or the Recast Insolvency Regulation, as applicable, or another sector specific European insolvency legislation applies or does not apply.
The Netherlands
Authors: Rank Willem (Pim) , Silverentand Larissa
Published: July 2018

This chapter discusses the law of set-off in the Netherlands. Under Dutch law, set-off operates as a mechanism for discharging claims. It allows a debtor to discharge his claim by reducing or extinguishing his creditor's claim by the amount of his cross-claim. There is no special regime for set-off clauses in finance documentation in the Netherlands. The chapter first provides an overview of set-off between solvent parties, focusing on statutory set-off, contractual set-off, and current account set-off. It then considers set-off against insolvent parties, taking into account the cooling-off period in bankruptcy, before turning to the so-called actio pauliana. It also explains specific provisions of the EU Collateral Directive aimed at protecting close-out netting provisions in a financial collateral arrangement. Finally, it analyses set-off in recovery and resolution of credit institutions and investment firms, along with issues arising in cross-border set-off.
New Zealand
Authors: Ross Jonathan
Published: July 2018

This chapter provides an overview of the law of set-off in New Zealand, both outside and within the context of insolvency. There are numerous statutes in New Zealand that regulate set-off and are applicable in particular circumstances. Set-off may be divided into current account set-off, independent (or legal) set-off, transaction (or equitable) set-off, and contractual set-off. The chapter first considers these types of set-off between solvent parties, along with set-off in relation to competing security interests under the Personal Property Securities Act 1999 (PPSA), before discussing set-off against insolvent parties. In particular, it explains insolvency set-off in liquidation, set-off in voluntary administration, netting insolvency set-off in liquidation and voluntary administration, and statutory management set-off. It also analyses issues arising from cross-border set-off, including the choice of law and cross-border application of PPSA.
Portugal
Authors: de Lemos Tiago Ferreira
Published: July 2018

This chapter provides an overview of the law of set-off in Portugal, both outside and within the context of insolvency. In Portugal, the policy justification for set-off is based on the fact that it may be used to avoid reciprocal payments whenever legally possible. The Portuguese Civil Code regulates set-off as part of its rules on contractual rights and obligations, but does not regard set-off as creating any security right (either in rem or in personam), lien, pledge, charge, mortgage, or other similar right over any assets of the parties involved. The chapter first considers set-off between solvent parties, focusing on unilateral set-off and contractual set-off, before discussing set-off against insolvent parties. It examines the relevant provisions of the Portuguese Netting Law and concludes with an analysis of cross-border issues relating to set-off between solvent parties and set-off against insolvent parties.
Russian Federation
Authors: Tchoubykina Elena
Published: July 2018

This chapter examines the legal requirements to a statutory set-off in the Russian Federation. In Russia, statutory set-off is regulated by Articles 410–412 of the Civil Code. From a legal standpoint, set-off constitutes a proper performance of obligations which discharges the respective claims of two parties. The chapter first provides an overview of set-off between solvent parties, focusing on statutory set-off, contractual set-off, and alternative schemes for enforcing contractual set-off arrangements. It then considers set-off in insolvency, with particular emphasis on set-off in bankruptcy proceedings of a corporate entity and of a credit institution. It also analyses key legal issues that may arise with respect to a set-off in the context of cross-border transactions.
South Korea
Authors: Hong Suhn-Kyoung , Cheong Seong-Koo
Published: July 2018

This chapter discusses the law of set-off in South Korea, along with certain restrictions on the exercise of the right of set-off in insolvency proceedings. The legal framework for set-off in South Korea is based on the Civil Code. The courts have also generally supported set-off as a means of satisfying a claim or discharging debt. The Korean Private International Law does not expressly lay down the governing law for set-off. This governing law issue is commonly discussed under two scenarios: set-off is undertaken on the basis of a set-off agreement between the parties; and set-off is undertaken in the absence of an agreement. The chapter first considers the governing law of contractual and non-contractual set-off in South Korea before turning to set-off between solvent parties and set-off against insolvent parties. It also analyses issues arising in cross-border set-off.
Spain
Authors: Herrera Antonio
Published: July 2018

This chapter discusses the law of set-off in Spain. Under Spanish law, set-off represents a means of extinguishing an obligation between a debtor and a creditor. Set-off occurs mainly as a form of payment rather than a guarantee. The chapter first considers set-off between solvent parties, focusing on the requirements of statutory set-off, set-off in case of assignment of credit rights, and set-off as a mechanism for creating security interests. It then examines set-off against insolvent parties, with emphasis on the scope of the prohibition set out in Article 58 of the Insolvency Act regarding set-off against an insolvent debtor and whether there are exceptions to this prohibition. The chapter also analyses set-off in financial transactions subject to Royal Decree Law 5/2005, along with cross-border situations relating to set-off against insolvent parties and choice of law with respect to set-off between solvent parties.