On The Head Office Of The Deposit Liabilities Of Overseas Branches Commitment

This thesis makes a relatively thorough and detailed study on legal rules applied by British and American courts when trying disputes on deposit at overseas branch of a bank. The focal point of this thesis is how to allocate risk between depositor and bank when political risk arises at the place of overseas branch. The key problem is whether head office has a duty to repay deposits at its overseas branch or not. This thesis employs many analytic approaches, mainly rule-analyzing approach, comparison approach, case analysis approach, law and economics approach. The author puts forward different schemes based on the difference between expropriation/nationalization risk and foreign exchange control risk after an introduction and analysis of various schemes of allocation of political risks and legislation.Chapter One is an introduction and divides into two sections. Section One inquires into the following topics: legal nature of deposit, classifications of deposit, forming time of deposit contract, legal nature of deposit contract, and bases of determining rights and obligations of deposit contract. Section Two inquires into the definition and types of political risk, the function of overseas branch and major legal rules which might determine whether head office has a duty or not. The author concludes that these legal rules are international law and internal law.Chapter Two analyzes whether head office has a duty or not by international law. Chapter Two divides into two sections. Section One inquires into the influence of Articles of Agreement of International Monetary Fund upon the allocation of foreign exchange risk. The author argues that it is difficult for Articles of IMF to influence the allocation of foreign exchange risk. Section One also makes a brief introduction of act of state doctrine and analyzes the application of this doctrine in disputes on deposit at overseas branch positively. The author concludes that act of state doctrine is a necessary doctrine at international law, but it is not a proper doctrine that can determine whether head office has a duty or not. Section Two inquires into basic rules of choice of law in contract in England and the United States, principle of party autonomy and doctrine of most significant relationship in deposit contract, and analyzes the applicability of foreign exchange regulations. Theauthor argues that principle of party autonomy has little function in deposit contract, that courts will conclude that the law of the place of overseas branch should be applied in deposit contract after using doctrine of most significant relationship. The author also argues that foreign exchange regulation of the place of overseas branch is applicable, that courts should not exclude the application of foreign exchange regulation by using the reservation of public policy. Section Two also introduces judicial practice of choice of law in deposit contract in England, the United States, France and Germany, and inquires governmental interest analysis approach in choice of law in deposit contract. The author finds the consistency of practice of Britain; namely the law of the place of overseas branch that takes the deposit should be applied generally. Although Section 2 of Article 6 of Restatement (Second) of Choice of Laws lists seven principles and Section 2 of Article 188 also lists five connecting places that should be considered, American courts determine that the law of the place of head office should be applied in most cases. The governmental interest analysis approach cannot provide a consistent result for choice of law in deposit contract. As to French and German practice, courts of the two countries apply the law of the place of overseas branch generally.Chapter Three analyzes whether head office has a duty or not by internal law. Chapter Three divides into three sections. Section One inquires into the application of ultimate liability doctrine in disputes on deposit at overseas branch, main points of separate entity doctrine and its application in disputes on deposit...