Lessons from UNCITRAL for Reforming the South African Legal Framework Concerning Security Rights in Movable Property

Authors

DOI:

https://doi.org/10.17159/1727-3781/2022/v25ia10992

Keywords:

Real security law, secured transactions, security rights, notarial bonds, pledge, law reform

Abstract

This article analyses the South African legal framework governing security rights in movable property with the view to inspire law reform. The analysis is based on a comparison of the current South African framework with the UNCITRAL Legislative Guide on Secured Transactions, a soft-law instrument containing international best practice. The problematic aspects of the South African framework benchmarked against the UNCITRAL Guide are: (1) not having a common legal framework that equally applies to all types of (including quasi-) real security transactions; (2) the scope of the current framework not being comprehensive (inclusive) enough; (3) not having an efficient enough method of creating the security right; (4) the current publicity method, particularly concerning special notarial bonds, being overly cumbersome and not providing effective public notice to third parties; and (5) the current enforcement measures potentially not being the most efficient. Regarding each of these problem areas, the article makes proposals on how the South African legislature could reform the current framework into one that is legally efficient and in step with international best practice.

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Author Biographies

Michel Marlize Koekemoer, College of Law, University of South Africa.

Michel M Koekemoer. B.Com LLB LLD. Senior Lecturer, College of Law, University of South Africa.

Reghard Brits, Faculty of Law, University of Pretoria.

Reghard Brits. B.Com LLB LLD. Associate Professor, Faculty of Law, University of Pretoria.

References

Bibliography

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Case law

Ikea Trading und Design AG v BOE Bank Ltd 2005 2 SA 7 (SCA)

Roshcon (Pty) Ltd v Anchor Auto Body Builders CC 2014 4 SA 319 (SCA)

Legislation

Alienation of Land Act 68 of 1981

Belgian Wet tot Wijziging van het Burgerlijk Wetboek wat de Zakelijke Zekerheden of Roerende Goederen Betreft en tot Opheffing van Bepalingen ter Zake (Belgian Pledge Act of 11 July 2013)

Deeds Registries Act 47 of 1937

Electronic Deeds Registration System Act 19 of 2019

Insolvency Act 24 of 1936

Land and Agricultural Development Bank Act 15 of 2002

National Credit Act 34 of 2005

Security by Means of Movable Property Act 57 of 1993

Uniform Commercial Code (USA)

Government publications

Draft Moveable Transactions (Scotland) Bill, 2017

GG 42744 of 3 October 2019

International instruments

EBRD Model Law on Secured Transactions (1994)

EBRD Core Principles for Secured Transactions Law (1997)

Model Inter-American Law on Secured Transactions (2001)

United Nations Convention on the Assignment of Receivables in International Trade (2001)

UNCITRAL Legislative Guide on Secured Transactions (2007)

Model Registry Regulations (2009)

UNCITRAL Legislative Guide on Secured Transactions: Supplement on the Security Rights in Intellectual Property (2010)

UNCITRAL Guide on the Implementation of a Security Registry (2013)

UNCITRAL Model Law on Secured Transactions (2016)

UNCITRAL Model Law on Secured Transactions: Guide to Enactment (2017)

UNCITRAL Practice Guide to the Model Law on Secured Transactions (2020)

Internet sources

Scottish Law Commission 2017 Report on Moveable Transactions Volume 1: Assignation of Claims https://www.scotlawcom.gov.uk/files/1715/1361/1309/Report_on_Moveable_Transactions_-_Volume_1_Report_249.pdf accessed 5 March 2018

Scottish Law Commission 2017 Report on Moveable Transactions: Volume 2: Security Over Moveable Property https://www.scotlawcom.gov.uk/files/9215/1361/1360/Report_on_Moveable_Transactions_-_Volume _2_Report_249.pdf accessed 5 March 2018

Published

2022-01-11

How to Cite

Koekemoer, M. M., & Brits, R. (2022). Lessons from UNCITRAL for Reforming the South African Legal Framework Concerning Security Rights in Movable Property. Potchefstroom Electronic Law Journal, 25, 1–32. https://doi.org/10.17159/1727-3781/2022/v25ia10992

Issue

Section

Articles