【Case Study】

X,a company incorporated in England granted a sterling loan to Y,a company incorporated in Chinese mainland.Interest was payable and capital repayable in sterling in London.The loan was secured by a mortgage of a house located in Beijing.The parties agreed that “this agreement shall be governed by Chinese law,” but that,“in the event of a conflict between the English and the Chinese texts of the contract,the English text shall prevail”.Later,disputes arose during the implementation of the contract,and Y filed an action against X before a Chinese People’s court.Y argued that the dispute should be governed by Chinese law,as it was the law chosen by them; nonetheless,X submitted that English law shall apply,as it was the law implied in the contract.The court ultimately applied Chinese law,as it held that Chinese law reflected the real intentions of the parties.(https://www.daowen.com)