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A Trustee in Continental Europe: The Experience of the Bank for International Settlements

Published online by Cambridge University Press:  21 May 2009

G.K. Simons  and
L.G. Radicati
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Extract

One of the objects of the Bank for International Settlements, as laid down in Article 3 of its Statutes, is “to act as trustee or agent in regard to international financial settlements entrusted to it under agreements with the parties concerned”. This text was adopted pursuant to the Final Act of the Hague Conference of 20 January 1930, and has remained unaltered since then. In fact it formed an annex to the Constituent Charter of the Bank, the text of the Constituent Charter being itself embodied in the convention respecting the Bank for International Settlements entered into at The Hague between the Governments of Germany Belgium, France, the United Kingdom, Italy and Japan of the one part and the Government of the Swiss Confederation of the other part. This Convention was one of the many separate but related agreements which were simultaneously executed, or approved in form, at The Hague on 20 January 1930 to give effect to the Young Plan and thus settle the reparations question.

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Articles
Information
Netherlands International Law Review , Volume 30 , Issue 3 , December 1983 , pp. 330 - 345
Copyright
Copyright © T.M.C. Asser Press 1983

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References

1. See Cmnd. 3343.

2. See paragraph 21 of the Young Plan.

3. These countries were Belgium, the United Kingdom, France, Germany, Italy, Japan and the United States of America.

4. See paragraph 12 of Annex 1 to the Young Plan.

5. See paragraph 13 of Annex 1 to the Young Plan.

6. See paragraph 14 of Annex 1 to the Young Plan.

7. See paragraph 64 of Annex 1 to the Young Plan.

8. See “Agreements concluded at the Hague Conference, January 1930” Pub. H.M. Stationery Office, 1930; 104 League of Nations Treaty Series 244.

9. See Weiser, F., Trusts on the Continent of Europe (1936) at p. 73Google Scholar.

10. The creditor governments in the Trust Agreement were Belgium, the United Kingdom, Canada, Australia, New Zealand, South Africa, India, France, Greece, Italy, Japan, Poland, Portugal, Rumania, Czechoslovakia and Yugoslavia.

11. See the Annual Reports of the Bank from 1930 to 1966.

12. Although the gold clause of the Young Loan was duly enforced when the United Kingdom and Sweden left the gold standard in September 1931, it ceased to be applied by the German Government after the USA left the gold standard in April 1933.

13. Judgment of the Civil Court of Basel-Stadt of 20 April 1935. See Weiser, F., op.cit., p. 80Google Scholar.

14. Judgment of the Court of Appeal of the Canton of Basel-Stadt of 29 November 1935. See Weiser, F., op.cit., p. 81Google Scholar.

15. Judgment of the Swiss Federal Court (Lausanne) of 26 May 1936 (BGE 62 II 140).

16. The French and German texts of the Treaty of 18 April 1951 were published, inter alia, in the Federal Republic of Germany in Part II of the Bundesgesetzblatt on 6 May 1952 (Bundesgesetzblatt, Jahrgang 1952, Teil II, pp. 447–504).

17. The Loan Agreement of 23 April 1954 between the USA and the ECSC contained, in an Annex, the original text of the Act of Pledge. See 238 United Nations Treaty Series pp. 340–405.

18. Loans made by the ECSC to such enterprises under the Act of Pledge were defined as “project loans“.

19. The instrument or instruments constituting the claim of the ECSC against borrowing enterprises were defined as “enterprise obligations” by the Act of Pledge.

20. See the attached table, which sets out the position as at 1 April 1981 and gives details of the 16 separate fund-raising operations carried out by the ECSC between 1954 and 1961 and secured by the Act of Pledge.

21. Section 8.01. b) of the Act of Pledge.

22. See the attached table referred to in footnote 20 above.

23. Section 8.01 a), d) and f) of the Act of Pledge.

24. The First, Sixth and Eleventh Supplemental Indentures, dated 25 May 1955, 16 May 1956 and 27 July 1960, respectively, amended the original text of the Act of Pledge of 28 November 1954.

25. Cf. Sections 57, 61 and 63 of the English Trustee Act, 1925, Sections 167 and 259 of the American Restatement of the Law of Trusts (2nd) 1959 and the US Trust Indenture Act of 1939.

26. Cf., for instance, Baur, F., “Lehrbuch des Sacheniechts” (9th ed., 1977), p. 532Google Scholar; Giosliëre, J.-C., “Gage”, in Juris-Classeur droit civil and Messineo, F., Manuale di diritto civile e commerciale (1952), par. 104Google Scholar, for the law in Germany, France and Italy respectively.

27. In respect of the relations between the ECSC and the future lenders the Act of Pledge constituted an undertaking by the ECSC for the benefit of third parties to create a pledge in their favour.

28. The authorisation to act on behalf of each of the new lenders to the ECSC under the Act of Pledge was accepted by the Depositary in the related supplemental indentures.

29. The project loan contracts, as well as those providing for the creation of the security, all contained clauses designating the law of the country where the loan was granted as the applicable law. For a discussion of some of the problems to which the implementation of the Act of Pledge gave rise cf. Blondeel, J.L. and Eycken, H. Vander “Les emprunts de la CECA” in Revue de la Banque, 1955, p. 350 ffGoogle Scholar; Salmon, J., Le róle des organisations internationales en matière de Prèts et d'Emprunts, problèmes juridiques (1958) p. 282 ffGoogle Scholar. and Wittig, S., Die Sicherung der Anleihegläubiger der Montanunion (1964)Google Scholar.

30. Cf. Larenz, K., Lehrbuch des Schuldrechts (12th ed., 1979) Vol. I, p. 479 ffGoogle Scholar.

31. For the text of this contract cf. Wittig, S., op.cit., p. 284 ffGoogle Scholar.

32. In view of the solution adopted in Germany the term Pfandhalter (as to which cf. Baur, F., Lehrbuch des Sachenrechts, op. cit., p. 540 ffGoogle Scholar.) to describe the Depositary is somewhat misleading: it is appropriate only insofar as documents relating to the claims had to be deposited with it to comply with the formal requirements of the Act of Pledge.

33. In France the validity of fiduciary assignments of claims for security has been defended by the author of a recent publication (Witz, C., La fiducie en droit civil français (1981))Google Scholar, but this view is not yet supported by case law. For the situation in Italy cf. Nitti, R., “Negozio fiduciario’, in Novissimo Digesto, vol. XIGoogle Scholar.

34. For the standard text of these contracts, as well as of a contrat de prêt between the ECSC and a borrowing enterprise, cf. Witting, S., op. cit., p. 304 ffGoogle Scholar.

35. The lodging of these notes and documents with the Depositary was not essential to the actual constitution of the pledge, whence the term tiers convenu was not technically appropriate to describe the Depositary's functions. In practice the notes and documents were held in the name of the Depositary by a sub-depositary appointed by it.

36. I.e. as terzo designato according to art. 2787.2 of the Italian Civil Code. In this country too the notes were actually held in the name of the Depositary by a sub-depositary.