Note, Throwing a Monkey Wrench into the Wheels of International Finance: Wells Fargo Asia Ltd. V. Citibank, N.A.
This note attempts to illustrate concisely the issues and potential ramifications of Wells Fargo. After describing the complex factual and procedural histories of the case, the note briefly surveys the various approaches to the Act of State doctrine and suggests that the Court should consider Act of State issues in Wells Fargo. Next, it examines the lower courts’ analyses of the case and what effects their rulings would have if the Court were to adopt them. Due to the resulting legal confusion that the lower courts’ decisions would wreak on the Eurodollar community, Wells Fargo should not remain as precedent. Currently, Wells Fargo would subject these deposits to the laws of New York. The Court should reject the lower courts’ narrow reasoning and instead decide Wells Fargo in light of the Act of State issues involved, especially by addressing questions of debt situs determination raised by previous cases. Upon examination of the various approaches to debt situs determination, the Court should adopt the incidents of the debt test, an approach that is both more equitable to bank expropriation cases and more consistent with the tenets of the Act of State doctrine. Since banks have always assumed that Eurodollar deposits are situated, or have their “situs,” in the host country of a branch office, the situs of the debt in Wells Fargo should be Manila. Philippine law would then decide the case. Yet, even if Philippine law were to govern the outcome of Wells Fargo, plaintiff Wells Fargo Asia Limited (“WFAL”) might still prevail.