Answer provided by Legal Vice Presidency Counsel.
In 1959, Aron Broches, General Counsel of the World Bank, wrote the following regarding the status of the agreements made by the Bank with member governments:
"(...) the Bank and the State which is a member of the Bank, are both subjects of international law and possess treaty-making capacity and since, even if the treaty-making capacity of the Bank is not unlimited, it must certainly extend to the loan and guarantee agreements which the Bank enters into in the course of carrying out what is probably its most important constitutional task."
The article continues by explaining the discussion around Article 102 of the U.N. Charter relating to the registration of every treaty and every international agreement. After this, the author reached the conclusion that the loan and guarantee agreements of the Bank are international agreements: "(...) the Bank's loan and guarantee agreements with its members are international agreements governed by international law. The steps by which I reached this conclusion were that the Bank is a subject of international law, that has treaty-making capacity, that capacity extends to the conclusion of loan and guarantee agreements and, finally, that the Bank's loan and guarantee agreements with its members are concluded in the exercise of that capacity and are intended to be, and are, governed by international law. Because of their character as international agreements, loan and guarantee agreements made between the Bank and those of its members which are also members of the United Nations are registered with the Secretariat of the United Nations in accordance with the provisions of Article 102 of the U.N. Charter and the Regulations issued thereunder. Article 102 calls for the registration of 'every treaty and every international agreement' made by members of the United Nations. Loan and guarantee agreements concluded with members of the Bank which are not members of the United Nations are submitted to the Secretariat for filing and recording pursuant to Article 10 of the Regulations."
For further information, here is the full reference of this article : "International Legal Aspects of the Operations of the World Bank", published in " Hague: Academie de droit international: Receuil des cours", 1959, III, p.297-409.
|A.||Answer provided by Legal Vice Presidency Counsel.|
The World Bank, legally known as the International Bank for Reconstruction and Development, is a public international organization created by sovereign member nations. The Bank's Articles of Agreement are accepted by each of its members upon membership. Under the Bank's Articles, the Bank makes loans to member countries or to entities in member countries, with the guarantee of the member. Each of the agreements providing for such loans are governed by the Bank's General Conditions Applicable to Loans and Guarantees. The General Conditions provide, with respect to enforceability, that the rights and obligations of the Bank under such agreements shall be valid and enforceable in accordance with their terms notwithstanding the law of any State or political subdivision thereof to the contrary. The General Conditions also provide for arbitration in event of a dispute.
Questions of sovereign immunity that would apply to a domestic financial institution are not relevant to the Bank's enforcement of its lending agreements.