United States Court of Appeals, Second Circuit

6. Legal Issues Is Chase liable to for the money Vishipco et al deposited in its Saigon branch?

7. Vishipco won. Chase was deemed liable and to repay the plaintiff the value in dollars. The decision of the lower court was reversed and remanded for a determination of applicable exchange rate to be utilized to value the piastre

8. D. NATIONAL MONETARY SYSTEMS Branch Banking (cont.) Conflicts Between Host and Home Country Regulations. As to deposits: There is no internationally recognized rule for deciding whether a branch must comply with the home or host state regulations. Suggested rule: A branch bank should only be subject to the rules and regulations of the host country, regardless of the directives given by the home country to the parent bank.

9. Rational Law of New York (forum state) should apply – Chase’s parent is in New York Under New York law Chase breached the contract

10. Harris v. Balk Rule The power to enforce payment of a debt depends on jurisdiction over the debt - situs Since Chase’s branch was neither open nor operating at the time of confiscation and was abandoned before, the decree had no effect on its debt

11. Sokoloff v. National City Bank of New York “When considered with relation to the parent bank, foreign branches are not independent agencies: they are what their name imports, merely branches and are subject to the supervision and control of the parent bank..Ultimate liability for a debt of a branch would rest upon the parent bank”

12. Rational Banks who accepts deposits at a foreign branch becomes a debtor not a bailee. If operations has to cease, then depositors should be informed and allowed to withdraw their deposits If situation prevents this action then the parent company is liable

13. Relevancy If deposit is with a branch of a bank then the parent is liable so one should investigate the banks that they are giving their money – assurance of safety While local banks may offer more attractive rates, with a less that cordial change of government, “act of state” doctrine could cause you to loose you deposit

14. Relevancy As a bank going overseas, be cognizant that depending on the form you choose the liability will be different – branch as opposed to separate entity.

15. Subsequent Events The lower court conducted a hearing and discovered that on April 24, 1975 the piastre had no value in New York and held that Vishipco could recover no damage Vishipco appealed again and on February 4, 1985 the US Court of Appeals for Second Circuit reversed and remanded for further proceedings – indicating how an exchange rate could be found