Study On The Application Of Laws Over Foreign-related Security

When businessmen and business organizations engage in international finance operations or international goods and service trade, international guarantees are frequently provided to secure performance of these transactions. International security involves different conflicting legal system. Therefore we should first of all solve the problem of the choice of applicable law when deciding legal issues concerning Foreign-related security. This paper focuses on private international law research on this particular area.Existing related academic works mainly concentrated on substantive law of independent guarantee. Conflict of laws problems about subordinate guarantees(especially security interest) have not been given enough attention, and we lack a theoretical system in private international law for international security. This paper aims to put forward the corresponding solutions on relevant theoretical and practical puzzles by explaining the existing legal system rather than propose the amendment of the existing legal institutions.Two major types of foreign-related securities guarantee and security interest. The latter involves the conflict rules in property while the former does not, so the choice of law problems of the them should be separated discussed. And there are also some common problems with persona guaranty and material guarantee to be, so this paper is divided into four chapters.Chapter I is an introduction on foreign-related security and relevant conflict of laws. The first section introduces the category and classification of foreign-related security, and points out the criteria for “foreign relation”. The second section illustrates legal conflicts over security. The third section describes two solutions for the legal conflicts: uniform substantive law and conflict rules. This part gives a brief introduction to the related international treaties and conventions, and emphasizes the importance of Dépe?age and characterization,which will run through the study in subsequent chapters. In addition, the independence of the application of law for guarantee capacity and the legal effect of China’s guarantee qualification restriction are analyzed.Chapter II focuses on the Choice of law problems on foreign-related guarantee. Party autonomy and doctrine of the most significant relationship are discussed with regard to their application to guarantee contracts. On this bases the relationship between the applicable laws of guarantee contract and the principal contract are discussed, as well as the scope of the matters governed by applicable law of guarantee contract, among which three issues are specially studied,which are about the liability of guarantor in concurrence with security interest,the characterization of beneficium excussionis,and the guarantee liability on occasion of the assignment of contractual right or the shift of obligation.The Chapter III discusses the choice of law for foreign-related security interest. This field involves both contract and real right in rem, so there are some difficulties in the identification. The application of law for collateral agreement and corresponding security interest shall be chosen respectively in accordance with different formula of attribution. The application of law for security interest shall be beyond the scope of party autonomy stipulated in the Article 37 of China’s Conflict Act. Subsequently this paper explores laws applicable for pledge of rights and the statutory security interests.In Chapter IV an important theoretical issue concerning different types of security are investigated, which is the exclusion of foreign law. In our country, because of the control of external debt and foreign exchange regulations, the application of foreign law in external guarantee litigations on the ground of overriding mandatory rules, other than evasion of law or reservation of public order. However the mandatory rules have been annulled so all external guarantee shall be valid without examination and approval.