指导留学生assignment需求

Question 2
A choice of law clause is invariably included in both syndicated loan agreements and bond issues. Why is this and, in your opinion, is it necessary or desirable to do this?

In my opinion, it is necessary to draw up a contract term of choice of law in both syndicated loan agreements and bond issues.

In international syndicated loan, the borrower, lender and guarantor are from different countries. Therefore, loan agreement and guarantee agreement, etc., are to be sighed between parties from two or more countries. Compared with international syndicated loan involved with only one country, things are more complicated. So the problem of choice of laws to international syndicated loan should be particularly considered.

Since 20th century, as a new means of financing in international economic field, international bonds got rapid development. Dramatic growth of transnational bond issues and tradings greatly promote global capital flow and international investment liberalisation, which play an important role in stimulating the development of global economy. However, with the rapid expansion of bond issues and tradings, a huge amount of legal problems emerge, one of the most important aspects is the conflict of laws http://www.ukassignment.org/daixieAssignment/daixieyingguoassignment/and the applicable law of international bond issues and tradings. Usually, international bond issues and tradings involve many countries' law systems, because the bond issuers, investors are often located in different countries, also, because international bonds are often transferred or mortgaged in various countries' securities markets, it will involve more legal systems. Referring to international bond issues and transfer, different countries has different laws, therefore, conflict of laws often occur.

Therefore, choice of law clause is desirable in both syndicated loan agreements and bond issues. Choice of law refers to the specific substantive legal norms regulating the rights and obligations of the parties in international civil relationship according to conflict rules. By further analysis, we should be clear that firstly applicable law is guided by conflict rules. Secondly, applicable law should be substantive norms, which directly regulate rights and obligations between parties. Thirdly, applicable law could be internal law of a country, norms of international treaty, or the international conventions.

According to different law application theories and judicial practice in different countries, there are many ways to choose applicable law, mainly including choices of applicable law based on the nature of law, the nature of legal relations, the most significant relationship, government interests analysis, choices of rules, splitting methods, autonomy of the will of parties, tendency of court decision recognized in foreign countries and the application of chosen law, etc. In dealing with the problems of law application of contracts involving foreign elements, the most important and widely accepted are the principles of choice of law based on Autonomy of Will of parties and choice of law based on the Most Significant Relationship.#p#分页标题#e#

1. Choice of law based on Autonomy of Will of the parties
“Autonomy of Will” is a very old principle, which once appeared in a book of professor Saucer in Bologna University in Italy in 14th century. The Oxford English Dictionary (OED online) listed the earliest uses that are different with current usage, such as, "liberty to follow one's will, personal freedom" or "freedom (of the will)".  Kant defined "autonomy" as "the property of the will by which it is a law to itself independently of any property of the objects of volition" . Feinberg thought a claim to autonomy in fact presupposed autonomy of the will  which first appeared in the field of contracts and gradually developed into the primary principle of choice of applicable law and an important way of choice of law in the private international law field. Reorganization of this principle helps to assure the predictability of law application results. If the court can assure the rights of both borrower and lender for choice of law, the parties will know what kind of law or law system is to dispose their rights and obligations in drafting process of loan agreement, then, they can take the chosen law or law system as a basis in drafting and performing the agreement, to interpret and explain the terms of contract according to it and to avoid disputes, making clear each parties’ responsibilities in inevitable disputes.

Personal autonomy is thought intrinsically beneficial to a person, which is a constituent of a distinctive kine of pleasure.  In contract law, the principle of “Autonomy of Will” gives both parties lots of freedom for choices, but it does not mean that the parties can choose whatever as the applicable law of their loan agreement without limitations. There are certain limitations on behaviors of choosing applicable law, such as Reserving of Public Order and Forbidding Evasion of Law, etc, depending on different countries. Reservation of Public Order is to exclude an applicable foreign law to retain significant interests of local court, basic policies, moral awarenesses and law principles when conflicts arising amnong them. Darwall believed that autonomy of the will is both necessary and sufficient for the moral law, which is also a kind of moral autonomy.  Evasion of Law refers to behaviors of parties involved in foreign civil relations to escape law through creating certain joints to take advantage of conflict rules and make favorable applicable laws for themselves. This is a problem produced by the variable joints in applying the principle of Most Significant relations. But some countries, such as China, takes a negative attitude towards Evasion of Law.

2. Choice of law based on the Most Significant Relationship
"Most Significant Relationship" formula originally advanced in the conflicts law of contracts , which is readily usable as a tool to give effect to equitable consideration.  “Place of the most significant relationship” refers to the place that is most closely related to the fact of civil relationship with foreigners and the parties in civil relations with foreign elements. “The Most Significant Relationship” also has a long history, and can be dated back to Savigny’s “sitz of legal relationship theory”. International syndicated loan involves with laws in two or more countries, and of all these laws concerning the lending transactions to different extent, one is most closely related to it. For example, the law in the country where the capital market lies in is generally most closely connected to the syndicated loan, and the laws in the countries where the leading bank and agent bank lie in also have close relationship with the syndicated loan. In practice, both parties of the borrower and the lender generally choose the law of the country most closely related to the loan transaction, as the staff of the leading bank and the agent bank are generally familiar with such laws and can easily find legal basis to solve disputes.#p#分页标题#e#

As for what is “the closest relationship”, different parties can have different interpretations in practice according to their different understanding and needs of protecting their own interests. The key factors leading to different interpretations are variable joints in "the Most Significant Relationship". This kind of variability stands in the way of protecting the parties’ interests and promoting economic development. Under such backgrounds, “Characteristic Performance” appears. Characteristic Performance refers to a kind of theory and method of choosing laws applicable to contracts depending on the particular characteristics of specific contracts. And it is often used together with the principle of “the Most Significant Relationship”.

It is noteworthy that the applicable law chosen by the parties according to Autonomy of Will principle and that chosen by the court based on the Most Significant Relationship principle should be substantive law, excluding conflict law and procedure law. At present, legislations in most countries and international treaties do not accept renvoi or transmission. Besides, in applying Autonomy of Will principle, there are generally two kinds: explicit choice and implicit choice. Explicit choice refers to the choice of applicable law expressed clearly in written words or speech. While implicit choice of law refers to the judge infers that the parties accept a certain applicable law according to some factors under the control of the laws of a certain country. The acceptance of explicit choice is undisputed. While implicit choice is recognized in some countries, but not in others. For example, the implicit choice of Autonomy of Will principle is not recognized in Chinese civil law.

Bibliography

Albert A. Ehrenzweig (1963) The "Most Significant Relationship" in the Conflicts Law of Torts.
     Law and Reason versus the Restatement Second. Law and Contemporary Problems,
     Vol. 28, No. 4, New Trends in the Conflict of Laws, pp. 700-705

Cavers, Re-Restating the Conflict of Laws: The Chapter on Contracts, TWENTIETH
     CENTURY COMPARATIVE AND CONFLICTS LAW 349-64 (Nadelmann, Von Mehren &
     Hazard ed. 1961)

Joel Feinberg (1980) The Nature and Value of Rights, in Rights, Justice, and the Bounds of
     Liberty, [Princeton, NJ: Princeton University Press]

Stephen Darwall (2006) The Value of Autonomy and Autonomy of the Will. University of
     Chicago.