Study On The Applicable Law Of AIIB's Loan Agreement

When operating a loan project,AIIB will reach a loan agreement with the borrower to specify their rights and obligations.Thus a loan agreement is the most significant legal document signed during the loan process.In order to solve disputes from the loan project,AIIB's loan agreement needs to choose an applicable law,which is the same as a normal International loan agreement.However,since the bank has an international legal personality,and the borrower could be a member state or an entity,so the problem is much more complicated.From the perspective of international law,this article will concentrate on this topic and based on AIIB's applicable law provision,discuss whether this provision is suitable and risk-free.After that,the author will try to give some advise on such provision.This article contains six parts.Chapter one start from an introduction of AIIB's loan agreement,including the nature of AIIB's loan agreement and how to classify these agreements.Then we will discuss the basic and special theory of conflict law applied by AIIB's provision.These questions will be the foundation of the following discussion.Chapter two will concentrate on the principle of autonomy in bank's applicable law provision,comparing bank's three kinds of different loan agreements,and find out the limitations it has made to this principle and why.Chapter three will describe how the most significant relationship theory has influenced on choosing bank's applicable law,and which standards it should take to judge whether the law has the most significant relationship with the loan agreement.In addition,we also discuss some special problems when using this theory.Chapter four is divided into two parts.First,we will give a brief introduction of bank's co-financing loan agreement,analyze the compatibility of applicable law provision when using such loan agreement.Than we turn to discuss the same question in bank's bonds agreement,analyzing some special key points of bonds agreement and how important they are.Chapter five focuses on the mandatory law which may have a negative effect on validity and enforceability of bank's loan agreement,we take exchange control regulation as a mainline to analyze this issue.In chapter 6,we will give some advise on how to improve practicability of AIIB's applicable law.In summary,AIIB need to make an evolution on its applicable law provision based on the principle of using international public law as governing law.Allowing sovereign-backed loan agreement to apply domestic law which has the most significance relationship with it.In the meantime,AIIB should accelerate the process of designing applicable law provision to co-financing loan agreement and bonds agreement.,and use appropriate methods to avoid negative impact caused by the mandatory law.In the meanwhile improve and perfect our domestic foreign-related law.