Conflict Of Laws In The Banking Industry Essay Example | Topics and Well Written Essays - 1000 words

Conflict Of Laws In The Banking Industry - Essay Example Nevertheless, a severable part of the contract which has a closer connection with another country may by way of exception be governed by the law of that other country.† The second sentence on Article 4(1) would make the jurisdiction of the transaction highly debatable as the location of the collateral would make it closer to Ruritania thus the question of whether or not the laws which will govern the disposal thereof would fall under the â€Å"severable†. In some countries, foreign entities are not allowed to own properties within its jurisdiction, which would bring about a conflict of laws on properties. Note also that is Article 4(2) of EC Convention on the Law Applicable to Contractual Obligations it is provided that â€Å"Subject to the provisions of paragraph 5 of this Article, it shall be presumed that the contract is most closely connected with the country where the party who is to effect the performance which is characteristic of the contract has, at the time of conclusion of the contract, his habitual residence, or, in the case of a body corporate or unincorporated, its central administration. However, if the contract is entered into in the course of that party's trade or profession, that country shall be the country in which the principal place of business is situated or, where under the terms of the contract the performance is to be effected through a place of business other than the principal place of business, the country in which that other place of business is situated.† The interpretation of the law is clearly enunciated in the leading case of Sierra Leone Telecommunications Co. Ltd. v. Barclays Bank Plc (1998) where it reiterated the general rule established under the case of Libyan Arab Foreign Bank v Bankers Trust Co [1989] that â€Å"where there is no choice of venue for redress or no provisions as to which law would apply is laid in the case of that the contract between a bank and its customer is governed by the law of the place where the account is kept, in the absence of agreement to the contrary† was affirmed.