Receivables Financing and the Conflict of Laws: The UNCITRAL Draft Convention on the Assignment of Receivables in International Trade

Abstract

Private international law solutions to legal problems created by differences among legal systems are often distrusted. Instead of a substantive solution, a choice of law rule merely provides a signpost -- and not always a clear one -- to the source where the solution may be found. Moreover, a solution incubated in a domestic factual and legal context may not prove appropriate or workable beyond local borders. In 2001, the Draft United Nations Commission on International Trade Law (UNCITRAL) Convention on the Assignment of Receivables in International Trade (Convention or UNCITRAL Convention), was approved by the Commission at its 2001 annual Session and submitted to the General Assembly for adoption as a United Nations Convention. This process is expected by be concluded by the end of 2001. This paper presents a general overview of the conflicts rules incorporated into the Draft Convention and their justifications. In general, it will be seen that the regime promises to bring a welcome level of appropriate order to an area of private international law badly in need of it. As such, it demonstrates the happy results of marrying general conflicts analysis with substantive commercial law expertise. However, several problem areas are identified where application of the rules will require a practised hand, or where Contracting States may need to adjust aspects of their existing national law regimes if the intended goals of enhanced certainty and predictability are to be realized.