| dc.description.abstract | In order for a retention of title clause (ROT-clause) to be valid against third parties under
Swedish law, the debtor must be prohibited to dispose of the object transferred. For
instance, the debtor must not be allowed to resell the object without the creditor’s
permission or before the object has been fully paid. If the creditor gives consent to the
debtor’s disposal, he loses his right of separation. Consequently, and contrary to the
regulation in most other states, the retailer can not use the payment from the resale to pay
for the goods acquired. Hence, the ROT-clause becomes more or less unusable in for
instance wholesaler-retailer relations. An abolishment of the rule that invalidates retention
of title in cases where consent to disposal is given, would mean that the ROT-clause
could provide a safer and more effective method for wholesalers and other suppliers to
secure their credit and offer a better position in the case of debtor insolvency. This could
potentially increase both credit sales and the overall competition in lending, which has
been on decline since the recent financial crisis. Since the Swedish regulation can be
considered an anomaly, an abolishment of the current regulation could also promote and
facilitate international trade. A deviant regulation could otherwise have a deterring effect
on foreign businesses and interfere with the principle of free movement of goods.
However, several possible side effects have been mentioned in the debate on the
abolishment of the rule. Also, the possibilities for an abolishment are somewhat limited,
mainly because of the requirement under Swedish law of individualisation in order for the
creditor to own the right of separation. A change to the current regulation, in order to
allow for the creditor to separate the object until the disposition actually takes place,
should not necessarily constitute a violation of the requirement. The view that right of
separation is sometimes possible despite consent to disposal is further supported by the
Swedish Supreme Courts decision in NJA 2009 s. 79. However, doubts have been raised
over the potential for increased lending in such a regulation. A possibility could be to
introduce a registration system for security rights. The system would function as a
substitute to the requirement of individualisation and could allow for the creditor to also
obtain security in proceeds and other substitutes of the originally transferred object. This
way, some of the more significant arguments for the preservation of the present
regulation would become irrelevant. Furthermore, a registration system allowing more
functional security rights and placing fewer restrictions on the parties, would be a step
closer to an appropriate and more harmonised international regulation of security rights. | sv |
