Secured Credit and the Harmonisation of Law

Secured Credit and the Harmonisation of Law

The UNCITRAL Experience

Corporations, Globalisation and the Law series

Gerard McCormack

This is a discerning analysis of international harmonisation efforts for secured credit law and examines the role of globalisation and finance capital in shaping such efforts. Gerard McCormack reveals how an ‘efficient’ law is often seen to increase the availability, and lower the cost, of credit, thereby contributing to international development. He considers whether the most comprehensive international standard – the United Nations Commission on International Trade Law (UNCITRAL) Legislative Guide (2008) – is actually suitable for adoption at the national level. In particular, he examines the hypothesis that American law and lawyers have shaped the content of the Guide to the extent that it is not suitable for translation into other laws.

Chapter 2: The Case for Harmonising and Modernising the Law of International Trade

Gerard McCormack

Subjects: law - academic, commercial law, company and insolvency law, corporate law and governance, finance and banking law, international commercial law

Extract

UNCITRAL’s business is the harmonisation and modernisation of the law of international trade. This chapter considers the case for harmonisation and modernisation in this sphere and asks a number of subsidiary questions. The first part considers the justifications advanced for harmonisation and modernisation. The second part considers the objections raised against harmonisation and modernisation. The third part considers whether harmonisation/modernisation can be achieved in practice. The fourth part explains the concept of path dependency and how this may influence the harmonisation and modernisation agenda. The final part concludes and summarises the discussion. WHY HARMONISATION AND MODERNISATION? In the UNCITRAL Legislative Guide on Secured Transactions, harmonisation and modernisation are seen as working hand in glove. The Guide calls for the modernisation of secured credit law by the reform of rules that inhibit the taking of security either in whole or in part. The intention is that States across the world should subscribe to the same set of basic principles for the taking and enforcement of security. Jurisdictional diversity would be reduced, if not entirely eliminated, in favour of a common international set of ‘modern’ prescriptions. The modernisation script sees the substitution of restrictive national provisions by international provisions that facilitate rather than obstruct secured credit. As pointed out in the previous chapter, it is hard to be against modernisation since the corollary implies being outdated and old-fashioned. On the other hand, one might criticise the Guide on the basis firstly, that the modernising agenda it propounds in reality reflects a particular...

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