A Study Of The Transnatinal Performance Of Currency Obligation

Admittedly, transnational performance of currency obligation is involved in almost all international economic and trade contracts. Moreover, currency is usually employed to realize the payment of various international remedy measures such as damages and restitution. However, probably these phenomena are so common that people often neglect the complexity in the issues of the transnational performance of currency obligation. Enlightened by this, this thesis attempts to explore these issues, and on the basis of the analysis of the fundamental legal principles and practical experience, feasible solutions to these issues are put forward.The thesis is composed of five chapters. Chapter1clarifies a few fundamental concepts relevant to the transnational performance of currency obligation. As the monetary law is a sphere relatively unknown to people, it is necessary to define these concepts from the very beginning. The chapter then shows the particularity of the transnational performance of currency obligation, namely the factor of monetary sovereignty, which will be discussed throughout the thesis as a consistent thread. Chapter2concerns’the basic legal principles in the process of transnational performance of currency obligation. As the theoretical basis of the thesis, the two fundamental principles in this chapter will be embodied in subsequent three chapters and serve as the theoretical foundation of the solutions to the specific following issues. Chapters3,4and5are equivalent to the sub-pandect of the thesis. In practice, the main risks facing the transnational performance of currency obligation are the devaluation of currency, exchange control and judgment of foreign currency obligation. These three chapters will expound them respectively. In details, the basic structure and main contents of the thesis are as follows:Chapter1defines the basic concepts concerning the performance of currency obligation, including currency, currency obligation and performance of currency obligation, etc. After explaining what "currency" means, and on the basis of an inquiry into the economic function of currency, the chapter introduces the related theories on currency. The interplay between the economic function of currency and the related theories has developed a series of new forms of currency which further give "currency" a more comprehensive legal meaning. As we know, it is much easier to recognize the currency obligation than to define it exactly, so above all, this chapter examines and summarizes the characteristics of currency obligation, and then clarifies its definition on this basis. There are two aspects in determining the currency obligation:one is the price of the currency obligation, and the other is the account currency which manifests the price, both of which are discussed in this chapter respectively. As the thesis indicates, a number of issues arise during the transnational performance of currency obligation, including roughly the time, the place and the specific currency of payment, which are mainly laid down in national civil and commercial legislations for a lack of international uniform solutions. In view of this, the chapter discusses briefly these issues macroscopically. Finally, the chapter considers the monetary sovereignty to be the most striking particularity in the transnational performance of currency obligation. Centered on the particularity, the chapter clarifies what will be discussed below.Chapter2deals with the fundamental legal principles of the international performance of currency obligation, Nominalism and Lex Monetea, which are the theoretical foundations of the following three chapters. The value of currency may be in flux during the period between the signature date of a contract and its expiration date, and the debtor just has to pay the nominal value without taking the flux into consideration. This is referred to be as Nominalism. Lex Monetea means applying necessarily the law of currency issuing country when defining the currency itself or currency system. Since Nominalism is the fundamental principle of monetary law and Lex Monetea has become the customary international law, these two principles will run through the whole process of the transnational performance of currency obligation and serve as important theoretical guides in court’s judgment. The thesis tries to probe into the meanings, properties and practice of these two principles, and analyzes them comparatively, thereby elucidating their practical significance in the transnational performance of currency obligation.Nowadays, devaluation of currency is one of the most pressing economical and social issues, and both the relative stable and unstable countries economically are at this risk to varying degrees. Chapter3offers two solutions, Revaluation and Value Clauses, to the issue of devaluation in the transnational performance of currency obligation. After discussing the theoretical foundation of the revaluation, and then introducing, analyzing, comparing and assessing the two classic revaluations in the history of international currency, the chapter explores the feasibility and scientificity of revaluation. Especially, the chapter introduces several kinds of value clauses and especially elaborates on the Gold Clause and the Index Clause because of their most frequent and widespread use. On these bases, an assessment and prospect of the clauses for their development tendency are offered.Chapter4addresses the issue of exchange control in the transnational performance of currency obligation. Although having made the elimination of exchange control one of its main purposes, the IMF Agreement still recognizes the international effect of exchange control measures the contracting states have taken to safeguard their individual monetary sovereignty and economic interests. The exchange control is of significant importance in international commercial transaction, and has a variety of effects on the transnational performance of currency obligation, which, for example, may make the monetary payment illegal, prevent the performance of monetary obligation, or exert an influence on the mode of performance. Starting from the discussion of the historical development, legal basis and legal restriction, the chapter explores the practical reanings of several key words in Article IIX, section2(b) of the IMF Agreement. the last part of the chapter, the private international rules on exchange control are to be introduced, analyzed and evaluated. Chapter5involves the dispute settlement of the performance of currency obligation----the judgment of foreign currency obligation. Forum currency/Breach day rule was once considered the basic principles in the judgment of foreign currency obligation in the common law system, and has had great effect on many civil law countries. The situation remained unchanged until1975when the British House of Lords delivered its judgment in the Milliangos. This case and a series of subsequent cases have developed the currency rule in the judgment of foreign currency obligation into as follows:courts can decide a case with foreign currency, or they can decide on converting the foreign currency into the domestic currency in light of the exchange rate on the payment day. Taking the Milliangos as a clue, the chapter divides the issue into two parts:the choice of currency and the choice of exchange date. On the basis of these two parts, the chapter continues to discuss their developments, practice in different countries and international and domestic legislations. In the meanwhile, the chapter, in combination with fundamental theories of currency obligation, inquires profoundly into the issues such as veracity, fairness, foreseeability and flexibility of the judgment of foreign currency obligation, and analyzes and evaluates its trend of internationalization as well.