Abstract
Abstract. This article examines conflict of laws issues related to issue and circulation of international bonds at international capital markets. It covers characteristic features of international bonds as financial instruments used for raising capital from sophisticated investors which determine, in particular, peculiarities of solving conflict of laws issues. These issues include determination of the law applicable to the formal and essential validity of an international bond, the rights and liabilities as between the issuer and the holder of the international bonds, legal status of a holder of such bonds, the questions of whether a holder obtains full title from a transferor and how title is to be transferred, and whether the transferee obtains title subject to or free from any defects in title of the transferor. The author specifies possible solutions of this conflict of laws puzzle that may include different competing legal systems. He argues that in common law and some other jurisdictions the fundamental lex voluntatis principle may also be applicable to international bonds due to their contractual nature resulting in possibility to choose the governing law for the bonds. The conventional approach as to the proprietary issues of the bonds refers to the lex situs of these securities as the governing law for these issues. The conclusions formulated at the end of the article present the author’s personal attitude towards legal solution of the problems related to determination of the applicable law for international bonds. Key words: international bonds, conflict of laws, issuer, governing law, lex voluntatis.
Highlights
Будь-яких дефектів титулу власності, що переходять при такій передачі
International bonds are customarily issued as bearer instruments which seek to enable the holder to possess direct legal rights as against the issuer; they are transferable by delivery and are negotiable instruments
Since a bond is a contract sui generis binding and enforceable as between the issuer and the investor, the fundamental lex voluntatis principle may well be applicable resulting in possibility to choose the governing law for the bonds
Summary
Будь-яких дефектів титулу власності, що переходять при такій передачі. Автор визначає можливі шляхи вирішення цієї колізійної проблеми, за якої конкуруючими можуть бути декілька правових систем. Традиционный подход к разрешению коллизионного вопроса относительно вещно-правовых аспектов обращения облигаций указывает на применение коллизионной привязки lex situs как права, применимого к таким вопросам. International bonds (often called Eurobonds, so we shall further use both terms as synonyms) are customarily issued as bearer instruments which seek to enable the holder to possess direct legal rights as against the issuer; they are transferable by delivery (without any other formal acts) and are negotiable instruments. A bona fide transferee acquires a good title free of any defects available against the claims of any transferor or holder Such negotiability is important in relation to sales of Eurobonds in the secondary markets. A Eurobond can be more transferred in a cross-border dimension
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