Insolvency treatment of retention of title arrangements in cross-border transactions

Since Professor Robin Morse’s seminal article on ‘Retention of Title in English Private International Law’ the regulatory landscape has changed considerably. The conflict of laws rules applicable to contractual and non-contractual obligations have been unified within the European Union pursuant to the Rome I and Rome II Regulations. The EU Insolvency Regulation provides a framework for the applicable insolvency law, also affecting retention of title clauses. These clauses are used widely in intra-Union trade and beyond, yet the treatment these clauses receive in different jurisdictions varies significantly. Under English law, the recent decisions in Wilson v Holt and in The Res Cogitans have introduced further uncertainty into an area of law that has been characterised as ‘a maze if not a minefield’. Moreover, when Brexit takes effect the legal landscape may change again. This chapter demonstrates the complexity that even simple transactions may give rise to in the cross-border insolvency context. It considers both the substantive law and the relevant conflicts of law rules in England and Germany.