Introduction:
any relationship between the two entities, whether individuals or institutions, can not be established only according to some set of rules. These rules may be rules or customs of a group or community, or some explicit laws and the existence of binding and authority to implement unworkable. The contract is the formal structure of a relationship between two or more parties, binding them together in a contractual relationship. And impose certain obligations on them and give them certain rights over each other. In case of any problem with these obligations or rights, the law of the land into work. But if the contracting parties in the various territories belong, then there is a question about the law that the land should go into effect that may arise. If the Contracting Parties is no consensus in earlier on this issue, it is likely that the problem is not yet solved. And one or more parties will suffer the loss. Thus, the need to make a decision at that time to take a decade, as that would follow the law
choice of law in loans and common bond:
Similar is the case in the financial contract. "All the legal issue under the financial contract must be determined in accordance with the law. One aspect of the contract can not exist in a legal vacuum." (1) loans and bonds are synchronized in the international, mostly in their personalities. And usually it involves borrowers and lenders from different countries. And "The greater the number of participating in the largest number of municipal laws and regulations of the law that need to be taken into account in the States." (2) There is no single set of international laws that can govern effectively shared loans and bonds, it is necessary for the parties to these contracts for the selection of an agreed system of law.
loan agreement usually are contracted between the highly sophisticated institutions, such as banks and companies and subsidiaries of the state, and even the sovereign states themselves. It involves a number of legal systems (even one bank operating at the international level can be subject to different legal systems) (3). International bond issues, too, involving issuers and investment banks from different countries. In some ways, international bonds (euro) bonds are even more 'international' of syndicated loans, as they are sold to the general public, individuals and other entities to buy and sell in many jurisdictions. During this session of the work of a number of transactions involving numerous legal documents occur. With these rights and obligations transactions shift from one entity to another quite frequently. When it happens in different legal systems, it creates uncertainty about which law should apply in this case. This uncertainty makes the business vulnerable to unpredictable. Eventually the whole labor market is suffering serious damage.
"in order to reduce such suspicions to a minimum, and an attempt was made in practice to apply one system of law on the deal and to exclude as much as possible applicability of other systems of law that the deal may have some connection. It seeks this generally to be achieved on the ground by the "choice of law" clause, which is subject to the system of a single rule of law _ 'proper law' _ health, enforcement and interpretation of contractual legal documents and others that make up the deal. "(4)
and provides application practical opportunity for the lender to be a priority in the "choice of law", as in the case of conflict, is the money that you need to be recovered. In the case of euro bonds, which helps investment bank in the sale of securities (5), and the situation becomes different, as lenders appear on the scene after the issuance of bonds, subject to certain conditions including the question of the choice of law. In any case, while the exercise of choice, preferably this system is chosen that is familiar to both sides, so does not need to change the direction of using a certain type of financial transactions. Moreover, we can deal with the legal trade issues, as well as be comfortable. It is also important that the chosen system is mature to a large extent and the competent enjoys a good reputation for impartiality. Political stability in that jurisdiction specific language and convenience are also important factors in choosing a particular system of law (6). Incident freeze foreign currency accounts following the imposition of emergency after the nuclear tests in 1998 (7), shares this loss huge that it took years to recover the market suffered. In such a situation any serious financial activity can grow without fear of the unseen. While the forum impose a no less important factor. The most important factor of having a choice of law clause is "to isolate the loan from legal changes took place in the country of the borrower." (8)
while holding identifies some of the key documents will be ready. For example, in the case of a bond issue, and the subscription agreement, trust deed, and the agreement between the managers and group sale agreement and bond instruments themselves, and in the case of a loan, the loan agreement. All these legal documents require the validity and enforceability and interpretation when needed. (9) and it can be done only under an agreed legal system.
define the rights and obligations and the interpretation of legal documents that would involve a number of related to the issue of different laws. These may include securities law, principles of contract interpretation of the law of contracts, insolvency law, the law of negotiable instruments, and the like. It should be for all of these laws relate to one system of law, so as to make their interpretation and application, if possible. (10)
and there are more than 310 jurisdictions in the world, which are grouped in nine IE chapters traditional English common law to America, / Public Law Mixed Roman, Germanic and Scandinavian, Mixed French Latin / Germanic, traditional French Latin, emerging disciplines, Islamic terms of reference and functions of unallocated (11). The combination of these categories further into three main types: the common law, the Napoleonic judicial authorities Romania Germanic (12) and the large number of jurisdictions have of course the ability to create problems in the case of international syndicated loans and bonds, where different legal systems would be involved. Therefore, it becomes necessary to be a "choice of law" clause in the legal documents
Conclusion:
international term, common in loans and bonds, involves a number of laws and judicial forums. Conflict of laws, in such a situation, it is normal. A combination of laws, due to the different approach, not a practical proposal. Financial laws coordinate at the international level is still the perfect proposal. Therefore, to the formation, interpretation and implementation of international contracts, there is a need to adopt a single system of law. This, and the parties can choose the contract at the closing of the contract time. This is done to ensure the validity and enforceability and interpretation of all the relevant loans and common bond contracts and legal documents. It helps eliminate the uncertainty and unpredictability of the fate of the contract. More than Ideally, it is outside the law, and there is the possibility to isolate the loan contract of legal amendments, in particular, in the country of the borrower. English law deserves to play such a role. Another advantage of choosing it: it does not ask for any contact from the lender or the borrower with England
fundamental importance of the inclusion of "selecting an item of law" in the global agreements for loans bundled and legal instruments of the bonds, is to get rid of the uncertainty about the outlook about the contract, through the provision of viable legal mechanism to resolve all the legal issues that may arise from time to time
References:
1). Wood, P R (1995) international loans, bonds and securities regulation. London: Sweet and Maxwell P-61
2). Slater R (1982) "collective bank loans" provided to the Conference on "transnational law of international business transactions" in Bielefeld, W. Germany, October 5 to 7, 1981, in the Journal of Commercial Law, p 173-199
3). Cranston R (03) the principles of banking law. 2nd Ed. Oxford: Oxford University Press. P. 438
4). Tennekoon R (1991) and international law and financial regulation. London: Butterworth. P. 16
5). Mishkin F (1992) money and banking economics and financial markets. 3 ed. New York: Harper Collins Publishing. P. 286
6). Paul C & G Montagu (03), banking and financial markets companion. 3 ed. London: Cavendish Publishing. P. 94
7). Washingtonpost.com, in http://www.washingtonpost.com/wp-srv/inatl/longterm/southasia/stories/pakistan052998.htm Visited on 14-05-05
8). Wood P R (1995) international loans, bonds and securities regulation. Op
9). Tennekoon R .. op
10). Slater R (1982) op
11). Wood P R (1997) International Financial Law maps; London: Allen & Overy. P. 9
12). Wood, P R (05) Oxford and Cambridge introductory lectures Financial Law, op cit
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