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Abstract
Should the head office of a United States bank be liable for the deposits made in a foreign branch where the assets of the branch have been frozen or expropriated by the sovereign government of the country where the branch is located? Two cases sought a hearing in the U.S. Supreme Court on this issue.1 In lower court decisions two courts of appeals2 ruled against the U.S. bank by holding the head office liable for frozen or expropriated foreign deposits. The U.S. Government asked the Supreme Court to review these cases. The following issues were raised: What is the status of the debt? What is the applicable law under customary choice of law rules? What would be the consequences of holding the head office of the U.S. bank liable for a foreign interbank deposit made abroad where the finding that the head office is liable is based upon an instruction to clear the deposit through an account in New York? To analyze these questions it is necessary to understand the facts and issues raised by the two cases.
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