Study Of Private International Law Issues In Cross-border Financial Contract Disputes

Ever since the financial crisis, a number of investors have been suffered great loss caused by a Financial derivative named KODA. KODA is a financial derivative feathered in high risk and leverage, and its sale is forbidden in a lot of countries. As it is unfamiliar in Chinese financial market, there has been a lack of legal system regulating on this product. In 2008, Beijing No.2 Intermediate People's Court accepted the litigation brought by DBS bank, which claimed the payback from the investor surnamed Hao. The case has become the first one on the financial derivatives, and brought intense discussion. The legal issues involved here including: first, whether the Chinese court has the jurisdiction over the case, second, whether the contracts here are valid and third, whether the choice of law made base on the parties autonomy could be applied in this case. The essay is focus on these issues and tries to give out a effective method on how to protect the benefits of the investors.The essay could be divided into four chapters. In the first chapter, the definition on the cross-border financial management contract was given even though it is too complex to give a recognized concept. Meanwhile, the brief introduction on the case was also give to help the readers having a better understanding. The second chapter was focus on the jurisdiction of the Chinese court. There is no doubt that the course was granted the jurisdiction over the case. In the third chapter, analyze on validation of the main contract was given. The main contract was invalid not just because it has the VAM which could be recognized as a fraud, but because it is a breach of Chinese mandatory law. The fourth chapter is focus on the guaranteed contract. The purpose of the two parties was to avoid the approve of foreign exchange bureau, which could be defined as a violation of public policy. Finally, on the basis of current situation and cases from other countries, the writer gave the suggestions on how to complete the legal system to supply a better protection for the investors.The essay is trying to search a model to redress the vulnerable part of the contract involved in the disputes like this. And we are expecting the complement of Chinese legislation and the establishment of legal system of Chinese characteristic to meet the request of the trend of judicial globalization.