The Research Of The Applicable Law Of AIIB's Loan Agreement

The applicable law of AIIB's loan agreement is the most significant problem to be solved when resolving the dispute between AIIB and the borrower.Both AIIB's loan agreement and the applicable law of AIIB's loan agreement are fundamental to confirm and protect the rights and obligations of the parties.The purpose of this paper is to clarify the restrictions from AIIB's legal documents on the applicable law of the AIIB's loan agreement.Besides that,the paper will discusses the application of the loan agreement of AIIB from the aspects of the principle of autonomy,the most closely related principle and the restriction of force law.According to the AIIB's documents,although General Conditions for Sovereign-backed Loans rules that the governing law of sovereign-backed loan agreement is international law,the parties could also choose other laws as the governing law.Operational Policy on Financing confirms the application of the principle of the most significant connection,but the applicable law cannot be the law within the jurisdiction of the loan beneficiary.Because of the special performance of the loan agreement,the most closely linked points of AIIB's loan agreement could be the location of the special account,etc.Besides that,AIIB's loan agreement may also be affected by the direct applicable law,including the foreign exchange control law,making the agreement difficult to perform.On this basis,the paper puts forward suggestions from the aspect of the choice of applicable law and the measures to avoid the negative impact of the foreign exchange control and to improve the laws of the country where the principal office of the Bank is located.