Secured Transactions Law Reform Research Articles

The Incompatibilities of the Secured Transactions Law Reform in Nigeria with Access to Credit: What Did the Lawmakers Get Wrong?

In 2017, the Nigerian National Assembly passed the Secured Transactions in Movable Assets Act (STMA), which is predicated on the theoretical underpinnings of Article 9 of the U.S Uniform Commercial Code (UCC Article 9), precisely its unitary-functional approach to secured financing. The STMA claims that its overall aim is to expand access to affordable credit especially for individuals and small businesses. Yet, despite this laudable ambition, certain provisions of STMA significantly betray its aim and objectives, mainly due to the reformers ostensible lack of a proper understanding of STMA’s ancestry, i.e., the UCC Article 9 and its case law jurisprudence that has developed over a period of seven decades. One of STMA’s defects which largely ignore the realities faced by most of the small businesses and individuals in need of credit financing, is its requirement of them to provide an insurance cover as a precondition for concluding a valid security agreement. Similarly, its private enforcement mechanism which requires an advance notice as well as the unwise involvement of the Nigeria Police in repossession of collateral is problematic: this could be a fertile ground for more cases of police brutality and corrupt practices. Through a doctrinal analysis, comparing the STMA provisions with those of UCC Article 9, the paper shows how certain provisions of the former are inimical to its overall aim and objectives. The paper also suggests transplantable solutions that are likely to assist Nigerian lawmakers in reforming this important legislation.

Floating Charges and Blanket Liens

Considering evolution of floating charges in England and blanket liens in America; different institutional structures shaping balances of rights between secured creditors, other creditors, and debtors; and implications of the institutionalist view on the current debates over English secured transactions law reform and on the proposal to abolish the fixed/floating charge distinction.

Identifying borrowed sources in secured transactions law reform

Abstract The enactment of Article 9 of the Uniform Commercial Code in the USA has had a profound influence on the reform of secured transactions law in other countries. The operational principles that animate Article 9 were first transplanted into Canada and later into New Zealand. In the last two decades, at least 25 countries have passed personal property security legislation (PPSA) based on these principles. On one level, one could claim that Article 9 has been transplanted into each of these 25 countries. However, on another level this story is far too simplistic. If one examines the various statutes, it becomes clear that a more complex process has been at work in which there has been innovation as well as borrowing. These innovations, in turn, influence the borrowings of other countries that enact a PPSA. In this highly dynamic environment the source of borrowing can be difficult to identify. This article examines the nature and extent of the borrowings that occur in connection with the reform of secured transactions in countries that have enacted a PPSA. It will identify three major templates that are available—namely, the most recent version of Article 9, the Canadian/New Zealand model, and the UNCITRAL Model Law. These templates will be reviewed in order to find markers that are present only in that template and not in the other two. These markers will be used to ‘fingerprint’ the PPSA legislation in other countries in order to measure the extent to which the jurisdiction has borrowed from each of the three templates. The article will conclude with a number of observations about the path of secured transactions law reform on an international level.

Identifying Borrowed Sources in Secured Transactions Law Reform

The enactment of Article 9 of the Uniform Commercial Code in the United States has had a profound influence on the reform of secured transactions law in other countries. The operational principles that animate Article 9 were first transplanted into Canada and later into New Zealand. In the last two decades, at least 25 countries have passed personal property security legislation (a “PPSA”) based on these principles. On one level, one could claim that Article 9 has been transplanted into each of these 25 countries. However, on another level this story is far too simplistic. If one examines the various statutes, it is becomes clear that a more complex process has been at work in which there has been innovation as well as borrowing. These innovations in turn influence the borrowings of other countries that enact a PPSA. In this highly dynamic environment the source of borrowing can be difficult to identify. This paper examines the nature and extent of the borrowings that occur in connection with the reform of secured transactions in countries that have enacted a PPSA. It will identify three major templates that are available, namely, the most recent version of Article 9, the Canadian/New Zealand model and the UNCITRAL Model Law. These templates will be reviewed in order to find markers that are present only in that template and not in the other two. These markers will be used to “fingerprint” the PPSA legislation in other countries in order to measure the extent to which the jurisdiction has borrowed from each of the three templates. The paper will conclude with a number of observations about the path of secured transactions law reform on an international level.

Secured Transactions Law Reform Project: Registration Discussion Paper

This paper was written as part of the policy paper series produced by the Secured Transactions Law Reform Project, which exists to consider the need for and shape of reform in this area of law in the UK, as well as to study and inform discussion about the reform of secured transactions law around the world. The paper is a working paper intended to stimulate discussion. The paper considers, in some detail, arguments relating to different registration systems and sets out for discussion two possible schemes: a notice filing scheme and a priority notice scheme. It is an attempt to articulate some of the arguments for and against these two different types of systems, and to identify further arguments relating to the shape and operation of a modern secured transactions register. It is assumed that the most modern technology would be available. Section 2 of the paper considers the rationales for registration, section 3 sets out the parameters resulting from the agreed core of a modern secured transactions law and the arguments for and against each parameter, and section 4 considers what information should be included in the register. Section 5 looks at two specific problems: identification (which arises particularly when non-corporate debtors are included) and empty filing (which arises particularly from advance filing). Section 6 compares document filing and notice filings, section 7 sets out the two schemes and section 8 concludes. The discussion, particularly in sections 5 and 7, is informed by comparative analysis of a number of notice filing systems. This analysis is included in four appendices, which account, in part, for the length of the paper.

Testing the Fitness of the Transplanted Ethiopian Personal Property Security Rightss Bill to the Local Context: A Critical Perspective

In what could be regarded as a defining moment in secured transactions law reform in Ethiopia, a new legal regime governing security interests has been drafted under the aegis of the International Finance Corporation (IFC), evidently based on Article 9 of the Uniform Commercial Code (UCC) of US or legal systems (instruments) influenced by it. Pending the approval of the draft law by the Ethiopian parliament, this article examines whether it is suitable to the Ethiopian local context. It argues that while the anatomy of the draft law and its general approach are consistent to the theme of enhancing access to credit which dictates secured transactions law reform across the globe, it suffers from shortcomings that must be addressed. First, the draft law mandates electronic collateral registration system in a country without the necessary perquisites/ for the successful operation of electronic registration system. Second, by adopting the Personal Property Security Right (PPSR) approach, the draft law unnecessarily excludes security rights in immovable property from its umbrella and defeats the purpose of comprehensive secured transactions law reform, i.e., implementing a legal regime that covers all types of assets, parties, and transactions. Third, the draft law has alarming terminological problems resulting from drafter(s) misapprehension of or insensitivity to the existing legal regime. Fourth, the unclarity of the provisions of the draft law on floating security interest could potentially lead to costly court litigation. Fifth, in departure from UCC Article 9 or recently reformed secured transactions laws, the draft law entitles the creditor to take possession of the collateral upon the debtor’s default, without putting in place the necessary tools to protect consumer debtors from potential abusive conducts of creditors. By empowering the Collateral Registry Office to order the police to assist the creditor in repossessing the collateral, it potentially subjects the debtor to extra-judicial deprivation of property right, with no judicial control mechanism. Based on comparative analysis of the key provisions and policies of UCC Article 9, the Draft Ethiopian PPSRs’ law along with the laws of other civil law jurisdictions to a limited extent, this article concludes that the draft law is ill-suited to the Ethiopian local context. The paper suggests that its approval by the parliament be delayed for further public scrutiny and debate among the relevant stakeholders. It proffers policy recommendations for revision.

Coordinated technical assistance: inter-organizational collaboration for better results in secured transactions law reform

Coordinated technical assistance: inter-organizational collaboration for better results in secured transactions law reform

Rethinking Ethiopian Secured Transactions Law through comparative perspective: lessons from the Uniform Commercial Code of the US

Various countries have reformed their secured transaction laws recognizing the significance of modern secured transactions law in enhancing access to credit and economic development. Ethiopia has not undertaken comprehensive secured transactions law reform, despite the demonstrable mismatch between the legal regime governing security interests and the country’s current political, economic and commercial realities. In-depth analysis of the Ethiopian secured transactions law is made in this article in the light of Uniform Commercial Code (UCC) Art 9, English, and French secured transactions laws and the EBRD (European Bank for Reconstruction and Development) Model law and the experience of civil law jurisdiction of Louisiana. I argue that secured transaction law reform in Ethiopia can be implemented based on UCC Art. 9 with some adjustment in light of Louisiana’s experience. The article uses the unitary concept of security interest and floating lien to exemplify the supremacy of the approaches and policies of UCC Art. 9 and its suitability as a model for potential secured transactions law reform in Ethiopia.Keywords: Credit market, UCC, unitary concept/theory, functional approach, floating lien, floating charge, security interest, self-help repossession, efficiency

Swimming in Tested Waters: Increasing Access to Credit in Nigeria Through a Reform of its Secured Transactions Law with Some Recipes of UCC Article 9

It is the view of many scholars that robust economic development of a country is heavily dependent on the sufficient availability of credit in the economy. Doing business leads to jobs-creation and poverty reduction – but that can only happen if sufficient credit is made available to both business and non-business entities. However, lenders of credit are in business and should obtain some form of security, of which proprietary (in rem) security plays a key role. An internet registry which displays all security interests and encumbrances in personal property, thereby providing notice to the public regarding a particular secured transaction is highly recommended for Nigeria. In addition, all personal property should be admissible as collateral, coupled with creditors’ self-help right to repossess and sell them in the event of default. The Nigerian legal framework on secured transactions is compartmentalized and insufficient to tackle today’s commercial realities, but UCC Article 9 which has so far escaped attention of lawmakers in Nigeria may offer a number of recipes for Nigeria’s secured transactions law reform.

Viehweg's Topics, Article 9 UCC, the 'kautelarische Sicherheiten' and the Hungarian Secured Transactions Law Reform

It goes without saying that secured transactions law is one of those emerging and growing legal disciplines which has attracted the most attention during the 1990s on all levels. Despite some encouraging developments and first steps taken in introducing new secured transactions laws, all the transitory economies of most Central and Eastern European countries seem to suffer fromt he same malaise in this context. In a nutshell: system-oriented thinking and the inherent deference to traditional legal principles of civil law tend to stymie the creation of a high-quality legal framework inevitable for the gradual formation of credit economy. A credit economy, without which no market economy can exist, and without which hardly could such burning problems, as housing or the revival of the economy, be solved. In sum, traditional legal rules, be they enshrined into civil codes, or just hovering somewhere in the vacuum, are not the tools for bringing about a credit economy. In order to effect the necessary changes, problem-oriented thinking should come to the forefront, to which the acceptability of even the tiniest technical details of a new law would not depend on whether the new solution could be brought under the penumbras of any of the traditional legal principles, but rather whether innovation could in practice improve the conditions for extending credits. And eventually, to what extent can any one solution help solving the main policy aim, which I will refer to in a somewhat shorthand way as the creation of credit economy. In attempting to outline the central thesis, I shall exploit the possibilities inherent to four main phenomena, the relationship of which has neither been analysed nor ever justaposed as categories having something common to date. The first phenomena is the recent Hungarian secured transactions law reform, which rates high not just in the Central and Eastern European region, but on a worldwide scale. The main deficiency of these reforms appears to coincide with the central thesis of this article. The second aid in my efforts could be best defined as the quintessence of a remarkable product of theory of law, that is, Theodor Viehweg's 'Topics and Law', which superbly explains the dilemmas lying behind the mechanics of system- versus problem-oriented thinking in law. Thirdly, I have made use of the sui generis, customary law based German security law, known under the heading of kautelarische Sicherheiten (that is, 'contractual-clauses-based securities), primarily becasue of the close resemblance of Hungarian and German legal systems. This peculiar pearl of German law is interesting also because it is the proof of the existence of problem-oriented thinking in civil law and of the fact that our central thesis has merit also in developed civil laws. Fourthly, Article 9 of the Uniform Commercial Code - to date the most successful secured transactions pattern - has become an important gear wheel of this paper mainly due to two factors. On one hand, as the repository of many efficient credit-enhancing mechanisms, some of Article 9's constituent elements have been utilised to demonstrate by concrete examples what is meant by problem-oriented thinking in the secured transactions domain. On the other hand, givent that Article 9 is in and of itself a kind of system, it is also a good example for the reconciliation of problem and system-oriented thinking. What is sure, however, is that the intention here is not to bring to the surface each and every technical deficiency of the new Hungarian secured transactions reform. Yet, if adhered to, the panacea offered here (that is, revealing the central conceptual and methodological deficiencies of the reform) may fundamentally change pre-conceptions of relevance to secured transactions law and may put reform efforts in transitory countries on the right track. All this applied to Hungary means that, in spite of the impressive results of the Hungarian reform, without parting with the presuppositions identified on the following pages, no genuine breakthrough should be expected.

A User’s Guide to Australian Secured Transactions Law Reform

extract] Talking about law reform, before we have a bill, let alone before reform has been enacted, has the appearance of hubris of the rankest sort. Talking about secured transactions law reform looks even worse. After all, it has been talked about for a long time. And there are many who consider a sufficient case has not been made for it. I look at the matter another way. For me, the persistence of the discussion of the case for reform suggests there is ground for a concern that will not go away. Now we have new draft legislation, for a Personal Property Security Act for Australia . It might be enacted as uniform state law, or as federal law under a suitable new referral of legislative power.

Recent Secured Transactions Law Reform in the Newly Independent States and Central and Eastern Europe

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