Lessons from UNCITRAL for reforming the South African legal framework concerning security rights in movable property

Abstract

This article analyses the South African legal framework governing security rights in movable property with a 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 applies equally 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. Finally, 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.