法律指导essay需求：Choice of Law-syndicated loan agreements and bon

Choice of Law
In my opinion, it is necessary to draw up contract term of a 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 security agreement, etc are to be sighed between parties from two or more countries. As for international syndicated loan involved with only one country, things are more complicated. So the problem of application of laws to international syndicated loan should be particularly considered.

Applicable law refers to the specific substantive legal norms regulating the rights and duties 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 duties between parties. Thirdly, applicable law could be internal law of a country, norms of international treaty, or the so-called 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 relation, the most significant relationship, government interest 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 problem 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 the will of parties and choice of law based on the most significant relationship.

1. Choice of law based on autonomy of will of the parties
“Autonomy of the will of parties” is a very old principle, which once appeared in a book of professor Saucer in Bologna University in Italy in 14Bologna University in Italy in 14 century. It first appeared inhttp://www.ukassignment.org/daixieEssay/falvessaydaixie/ the field of contracts, and gradually developed into the primary principle of choice of applicable of law and an important way of choice of law in the whole of international law field. Reorganization of this principle helps assure the predictability of law application result. If the court can assure the rights of the parties of both the borrower and the lender, the parties will know what kind of law or law system is to dispose their rights and duties in drafting process of loan agreement, take the chosen law or law system as the basis of drafting and performing the agreement, and interpret and explain the terms of contract according to it to avoid disputes and make clear each parties’ responsibilities in inevitable disputes.

The principle of “autonomy of the will of parties” gives both parties lots of freedom of 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 the 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 the applicable foreign law to retain significant interest of local court, basic policies, moral concept and law principles when conflicts arising between them. Evasion of law refers to the foreign legal relations party’s behavior of escaping law through creating certain joints to take advantage certain rules of conflicts and escape the appropriate applicable law and apply the law to the his advantage. This is a problem produced by the variable joints in applying the principle of the most significant relations. Some countries, for example, China, takes a negative attitude towards evasion of law.#p#分页标题#e#

2. Choice of law based on the most significant relationship
“Place of the most significant relationship” refers to the place that is most closely related to the fact of civil relationship and its 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 stuff of the leading bank and the agent bank are generally familiar with such laws and can easily find legal basis to solve disputes.

As for what is “the closest relationship”, different parties can have different interpretations in practice according to their different understanding and need of protecting their own interests. The key factors leading to different interpretation 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 the 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 treaty do not accept renvoi or transmission.

Besides, in applying autonomy of will of the parties principle, there are generally two kinds: explicit choice and implicate 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 of the parties principle is not recognized in Chinese law.