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Actual - Choice Of Law In Syndicated Loans And Bonds
INTRODUCTION:
Any relationship between two entities, either persons or institutions, cannot be established except in accordance with some set of rules. These rules may be unenforceable norms or customs of a group or society, or some explicit laws having a binding and enforceable authority. A contract is a formal structure of a relationship between two or more parties, binding them together into a contractual relationship; and imposing upon them certai
Any relationship between two entities, either persons or institutions, cannot be established except in accordance with some set of rules. These rules may be unenforceable norms or customs of a group or society, or some explicit laws having a binding and enforceable authority. A contract is a formal structure of a relationship between two or more parties, binding them together into a contractual relationship; and imposing upon them certai
According to USFDA, a combination product is one composed of any combination of a drug and device; biological product and device; drug and biological product
n obligations and granting them certain rights over each other. In case of any problem with these obligations or rights, law of the land would come into action. But if the contracting parties belong to different lands, then there would arise a question as to law of which land should come into force. If the contracting parties have no earlier consensus over this issue, then it is more likely that the problem would remain unresolved; and one or more part
; or drug, device, and biological product and fixed dose combination would include two or more combinations of drug.
Examples of combination products may in
Examples of combination products may in
es would suffer the loss. Hence, the need to decide at the time of making contract, as to which law would be followed.
CHOICE OF LAW IN SYNDICATED LOANS AND BONDS:
Similar is the case of the financial contract. ‘Every legal issue under a financial contract must be determined in accordance with a system of law. An aspect of a contract cannot exist in a legal vacuum.’(1) Syndicated loans and bonds are mostly international in their character. They usual
CHOICE OF LAW IN SYNDICATED LOANS AND BONDS:
Similar is the case of the financial contract. ‘Every legal issue under a financial contract must be determined in accordance with a system of law. An aspect of a contract cannot exist in a legal vacuum.’(1) Syndicated loans and bonds are mostly international in their character. They usual
lude drug-coated devices, drugs packaged with delivery devices in medical kits, and drugs and devices packaged separately but intended to be used together.
y involve borrowers and lenders from various countries; and ‘the greater the number of countries involved the greater the number of municipal systems of law which have to be considered.’(2) As there is not single set of International laws that could effectively govern the syndicated loans and bonds, it is necessary for the parties to these contracts to choose an agreed system of law.
A syndicated loan agreement normally is contracted between the hig
A syndicated loan agreement normally is contracted between the hig
here is enormous increase in the number of combination products entering the market in the recent years. Combination products have proven advantages but fixe
ly sophisticated institutions like banks, corporations, state corporations, and even the sovereign states themselves. It involves a number of systems of law (even a single bank operating internationally can be subject to different systems of law)(3). The international bond issues, too, involve issuers and investment banks from different countries. In some respects, international bonds (Eurobonds) are even more ‘international’ than the syndicated loans
d dose combinations are still in the process of convincing regulatory authority on their advantages over the single ingredient formulations.
Combination pro
Combination pro
, as they are sold to the public at large, and the individuals and other entities buy and sell them in numerous jurisdictions. During this course of business a number of transactions involving numerous legal documents take place. With these transactions rights and liabilities shift from one entity to another very frequently. When it happens in different systems of law, it creates ambiguity about which law should apply in which case. This ambiguity make
ucts have become life saving products for the pharmaceutical companies who doesn’t have many innovative molecules in their product pipeline and have been inc
the business vulnerable to unpredictable situations. Eventually the whole business market suffers serious damage.
“In order to reduce such uncertainty to a minimum, an attempt is made in practice to apply one system of law to the transaction and to exclude as far as possible the applicability of other systems of law with which the transaction may have some connection. This is generally sought to be achieved in practice by a ‘choice of law’ clause whi
“In order to reduce such uncertainty to a minimum, an attempt is made in practice to apply one system of law to the transaction and to exclude as far as possible the applicability of other systems of law with which the transaction may have some connection. This is generally sought to be achieved in practice by a ‘choice of law’ clause whi
easingly used in the product life cycle management. Even the companies having product patents are trying to extend their product life cycle through the combi
h subjects to one governing system of law _ ‘the proper law’ _ the validity, enforceability and interpretation of the contractual and other legal documents which constitute the transaction.”(4)
The practicality provides the opportunity to the lender to have preference in ‘choice of law’, as in case of a dispute, it is his money that would need to be recovered. In case of the Euro bonds, where an investment bank helps in selling securities(5), the situ
The practicality provides the opportunity to the lender to have preference in ‘choice of law’, as in case of a dispute, it is his money that would need to be recovered. In case of the Euro bonds, where an investment bank helps in selling securities(5), the situ
nation products and maximize the revenues. But the companies involved in this practice are overlooking that they are burdening the patients both economically
tion becomes different, as the lenders appear on scene after the bond is issued under certain terms including the matter of choice of law. In any case, while exercising the choice, it is preferred that such system is chosen that is familiar to the parties, so that the tendency of using certain type of financial transactions needs not to be changed. Further, the dealing with legal as well as business issues could be convenient. It is also important that
and physically. They need to rightly judge the benefits of the combination products and they have to even look at the risks involved when combining the produ
the system chosen is greatly mature and the relevant jurisdiction enjoys good reputation for its impartiality. Political stability in that specific jurisdiction and convenience of language are also important factors in choosing a certain system of law(6). The incident of freezing of foreign currency accounts following imposition of emergency after the atomic tests in 1998(7), the stock market suffered such a huge loss that it took years to recover. In
ts. Some of the combination products were well accepted by physicians while others suffered. Companies involved in development of combination products are fi
such a situation no serious financial activity can grow without fear of the unseen. While the enforcing forum is not less important a factor; the most significant factor of having the choice of law clause is the “insulation of the loan contract from legal changes in the borrower’s country.”(8)
While outlining the contract some of the essential documents would be prepared; for example, in case of a bond issue, the subscription agreement, the trust deed
While outlining the contract some of the essential documents would be prepared; for example, in case of a bond issue, the subscription agreement, the trust deed
ding difficulty in defining their combination products and facing various challenges from selecting a combination to marketing it.
Following aspects would a
Following aspects would a
the agreement between managers, the selling group agreement and the bond instruments themselves, and in case of the syndicated loan, the loan agreement. All of these legal documents would require validity, enforceability and when needed interpretation.(9) This could only be done under an agreed system of law.
Determination of rights and liabilities and interpretation of the legal documents would involve a number of laws relevant to the different issu
Determination of rights and liabilities and interpretation of the legal documents would involve a number of laws relevant to the different issu
dd to the challenges in developing combination products:
Which markets to tap where the combination products can do fairly well?
Which combination prod
Which markets to tap where the combination products can do fairly well?
Which combination prod
. These may include the securities law, principles of contract, interpretation of contracts law, insolvency law, negotiable instruments law, and the like. All these laws should relate to one system of law, so as to make their interpretation and implementation possible.(10)
There are more than 310 jurisdictions in the world, which are grouped into nine classes i.e. Traditional English, American Common Law, Mixed Roman/common law, Germanic and Scandinav
There are more than 310 jurisdictions in the world, which are grouped into nine classes i.e. Traditional English, American Common Law, Mixed Roman/common law, Germanic and Scandinav
cts are meaningful and rational?
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin
ian, Mixed Franco-Latin/Germanic, Traditional Franco-Latin, Emerging Jurisdictions, Islamic Jurisdictions and Unallocated Jurisdictions(11). These categories are further combined into three major types: Common Law, Napoleonic and Roman-Germanic jurisdictions.(12) This much number of jurisdictions naturally has a potential to create problems in case of international syndicated loans and bonds where different systems of law would be involved. So, it beco
tions increase the patient compliance?
What would be the developing cost?
How to tackle the risks encountered during combination product developmen
What would be the developing cost?
How to tackle the risks encountered during combination product developmen
es imperative to have ‘choice of law’ clause in the legal documents.
CONCLUSION:
The term international, in the syndicated loans and bonds, entails multiple laws, forums and jurisdictions. The conflict of laws, in such a case, is natural. Combination of laws, given their different approaches, is not a workable proposition. Harmonization of financial laws at international level is still an idealistic suggestion. So, to form, interpret and execute the
CONCLUSION:
The term international, in the syndicated loans and bonds, entails multiple laws, forums and jurisdictions. The conflict of laws, in such a case, is natural. Combination of laws, given their different approaches, is not a workable proposition. Harmonization of financial laws at international level is still an idealistic suggestion. So, to form, interpret and execute the
t?
As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel
As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel
nternational contracts, there is a need to adopt a single system of law. This, the parties to a contract can choose at the time of the concluding of the contract. This is done to ensure the validity, enforceability and interpretation of all the legal documents relevant to the contracts of syndicated loans and bonds. It helps eliminate the uncertainty and unpredictability of the fate of a contract. Most ideally, it is an external law, having a potential
ping new procedures for reviewing their safety, efficacy and quality.
Professional from academic institutions, pharmaceutical industries, health care indust
Professional from academic institutions, pharmaceutical industries, health care indust
to insulate the loan contract from legal changes, especially, in the borrower’s country. English law worthy of playing such a role. There is another advantage of choosing it: it doesn’t demand any connection of the lender or borrower with England.
The fundamental importance of the inclusion of ‘choice of law clause’ in the international syndicated loan agreements and the legal instruments of the bonds, is to get rid of the uncertainty concerning the e
The fundamental importance of the inclusion of ‘choice of law clause’ in the international syndicated loan agreements and the legal instruments of the bonds, is to get rid of the uncertainty concerning the e
y and representatives from various regulatory agencies are working out to design the regulatory requirements for manufacture and sale of combination products
xpectations about the contract, by providing a workable legal mechanism to resolve all the legal issues which would arise from time to time.
REFERENCES:
1). Wood, P R (1995) International Loans, Bonds and Securities Regulation; London: Sweet & Maxwell P-61
2). Slater R (1982) “Syndicated Bank Loans” presented to the Conference on ‘The Transnational Law of International Commercial Transactions’ at Bielefeld, W. Germany, October 5-7, 1981, in the Jour
REFERENCES:
1). Wood, P R (1995) International Loans, Bonds and Securities Regulation; London: Sweet & Maxwell P-61
2). Slater R (1982) “Syndicated Bank Loans” presented to the Conference on ‘The Transnational Law of International Commercial Transactions’ at Bielefeld, W. Germany, October 5-7, 1981, in the Jour
.
As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de
As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de
al of Business Law pp 173-199
3). Cranston R (2003) Principles of Banking Law; 2nd Ed. Oxford: Oxford University Press; p 438
4). Tennekoon R (1991) The Law and Regulation of International Finance; London: Butterworths; p 16
5). Mishkin F (1992) The Economics of Money, Banking, and Financial Markets; 3rd Ed. New York: HarperCollins Publishers; p 286
6). Paul C & Montagu G (2003) Banking and Capital Markets Companion; 3rd Ed. London: Cavendish Publi
3). Cranston R (2003) Principles of Banking Law; 2nd Ed. Oxford: Oxford University Press; p 438
4). Tennekoon R (1991) The Law and Regulation of International Finance; London: Butterworths; p 16
5). Mishkin F (1992) The Economics of Money, Banking, and Financial Markets; 3rd Ed. New York: HarperCollins Publishers; p 286
6). Paul C & Montagu G (2003) Banking and Capital Markets Companion; 3rd Ed. London: Cavendish Publi
elopment. They need to be wiser in analyzing the market trends and the regulatory requirements.
Companies that provide selfless information through particip
Companies that provide selfless information through particip
hing; p 94
7). Washingtonpost.com, at http://www.washingtonpost.com/wp-srv/inatl/longterm/southasia/stories/pakistan052998.htm visited on 14-05-2005 8). Wood P R (1995) International Loans, Bonds and Securities Regulation; op cit
9). Tennekoon R.. op cit
10). Slater R (1982) op cit
11). Wood P R (1997) Maps of World Financial Law; London: Allen & Overy; p 9
12). Wood, P R (2005) Oxford and Cambridge Introductory Lectures of Financial Law, op ci
7). Washingtonpost.com, at http://www.washingtonpost.com/wp-srv/inatl/longterm/southasia/stories/pakistan052998.htm visited on 14-05-2005 8). Wood P R (1995) International Loans, Bonds and Securities Regulation; op cit
9). Tennekoon R.. op cit
10). Slater R (1982) op cit
11). Wood P R (1997) Maps of World Financial Law; London: Allen & Overy; p 9
12). Wood, P R (2005) Oxford and Cambridge Introductory Lectures of Financial Law, op ci
tion in industry events and feedback to regulatory authorities would be able to face the challenges and will be successful in developing combination products
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