FINLAND Law and Practice Contributed by: Timo Lehtimäki, Niklas Thibblin, Essi Hietaoja and Oona Honkamaa, Waselius
the beneficiary of the floating charge (with 50% going to unsecured creditors). Enforcement of security in insolvency proceed - ings is subject to specific rules. For example, the filing for company restructuring usually triggers a moratorium. 6.2 Foreign Law and Jurisdiction Pursuant to the Rome I Regulation, a contract shall be governed by the law chosen by the parties. Accordingly, the choice of a foreign law as the governing law of the contract is a valid choice of law between the parties and will be recognised by the courts of Finland. However, a Finnish court may not apply foreign law of a state if it is against the ordre public . However, the Rome I Regulation does not regu - late the effects of transactions in relation to third parties (ie, ultra partes), and there is no harmo - nisation on this. Therefore, interpretation may vary from jurisdiction to jurisdiction, and there is no binding legal framework for resolving con - flicts – this may particularly impact on security over receivables where the creditor and debtor of the receivables are not located in the same jurisdiction. Further, submission to a foreign jurisdiction is also generally recognised in Finland, though enforcement of foreign judgments may be lim - ited, as discussed in 6.3 Foreign Court Judg- ments . 6.3 Foreign Court Judgments The enforceability of a judgment by a foreign court or of an arbitral award depends on where the judgement or arbitral award is issued. In each case, the enforcement of foreign judgments or arbitral awards in Finland is subject to the pro - visions of the applicable regulation, convention
or treaty (such as the Brussels I Regulation, the Lugano Convention, the Hague Convention and the New York Convention). If no regulation, convention or treaty applies, enforcement may require a re-examination of merits and/or judg - ment of: • a Finnish court; • a court of another EU member state under the Brussels I Regulation; or • a court of a country signatory to an enforce - ment treaty with Finland or the EU, as appli - cable. 6.4 A Foreign Private Credit Lender’s Ability to Enforce Its Rights The commencement of insolvency proceedings may delay or prevent enforcement. For example, the filing for company restructuring usually trig - gers a moratorium, as outlined in 7. Bankruptcy and Insolvency . 6.5 Timing and Cost of Enforcement The costs and speed of the process largely depend on the security asset in question and on whether enforcement is part of insolvency proceedings. Since under the relevant security agreement the pledgee is usually free to choose the means of enforcement regarding security over spe - cific movable property (such as shares, bank accounts and receivables), the timeframe for the completion of the enforcement proceedings and the distribution of the enforcement proceeds primarily depends on the practicalities, such as how swiftly the security assets can be sold and/ or instructions given. However, in the case of a floating charge, giv - en that the pledgor may plead its case in the court proceedings and appeal the court’s deci -
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