dissenting.
The majority opinion, as does the opinion of the district court, demonstrates a great deal of heart but will not stand careful legal analysis. For this reason, I respectfully dissent.
As was recognized by the district court, although Trinh, the plaintiff, alleged only diversity jurisdiction (28 U.S.C. § 1332), the court also had federal question jurisdiction because Citibank is a national bank (12 U.S.C. § 632). The district court then, in making its choice of law determination, wrestled with the question whether Michigan or federal common law conflict of laws should be applied and came to the conclusion that, irrespective of which it applied, Vietnam law governed. Trinh v. Citibank, N.A., 623 F.Supp. 1526, 1531 (E.D.Mich.1985). The parties, on appeal, agree with this determination.
Citibank advanced several theories of defense. The first was that, under the very terms of the contract between the depositor and Citibank at the time the deposits were made, and particularly in the light of the commercial law of Vietnam as to the effect of force majeure, Citibank was not liable to Trinh. The second defense was that the failure of Citibank to pay resulted from sovereign risk or force majeure rather than credit risk and that, under Vietnam law, sovereign risk was assigned to the depositor. Another defense was that the National Bank of Vietnam claimed the assets and assumed the liabilities of Citibank after Citibank’s employees fled the country and before the communists took over. Still another defense was that Citibank was not liable to Trinh because the revolutionary communist government expropriated Citibank’s Saigon branch, including the assets. Without intending to deprecate Citibank’s other defenses, I believe that its first defense, based upon the terms of the deposit contract, is a valid one and requires a reversal of the district court’s judgment in favor of Trinh.1
The pertinent facts are undisputed. Citibank (formerly First National City Bank) is an international banking corporation based in New York which for many years prior to May 1975 operated a branch bank in Saigon, South Vietnam. In order to operate that branch, Citibank had to abide by Vietnamese banking laws, which, inter alia, required Citibank to establish a branch rather than a distinct corporate subsidiary, to maintain all the branch’s assets in the local currency (piasters), and to keep all the branch’s capital, assets, funds, books, and records separate and apart from those of the American home office.
In 1974, Trinh’s father, a senator in the South Vietnamese government, opened a joint savings account at Citibank’s Saigon branch in his name and that of his son.2 The account paid an interest rate of 19 percent, compounded daily. The deposit agreement governing the account expressly provided, as required by Vietnamese banking law, that the account was payable solely at the Saigon branch office3 and solely in piasters. The deposit agreement also provided explicitly that Citibank’s Saigon branch “does not accept responsibility for any loss or damage suffered or incurred by any depositor resulting from government orders, laws, levies, taxes, embargoes, moratoriums, exchange restrictions or from any other cause beyond its control.”
*1174In early April 1975, as North Vietnam’s military forces approached Saigon, American embassy officials met with the branch bank’s officers to consider the future safety of the branch bank’s employees, both Vietnamese and American. The meetings produced a contingency plan for an emergency evacuation. During this time, the branch bank encouraged concerned depositors to withdraw their money, but the situation precluded, as the majority opinion recognizes, posting formal notices suggesting such withdrawals.
On April 24, 1975, on the eve of North Vietnam’s takeover of Saigon, Citibank closed its Saigon branch and evacuated the branch’s personnel in conjunction with the general evacuation coordinated by the American embassy. All of the branch’s documents, files, records, and books were left in the building. The branch’s keys, vault combination, and official documents list were entrusted to the Embassy’s economics attache with a request that he turn them over to the National Bank of Vietnam, South Vietnam’s central banking authority. There is no contention that Citibank removed any assets of its Saigon branch.4
The next day, on April 25, 1975, the South Vietnamese Finance Ministry and the National Bank of Vietnam issued a joint communique announcing:
[T]he Chase Manhattan Bank, the First National City Bank [Citibank] and the Bank of America [have] closed temporarily without asking for permission from our government.... The National Bank would like to remind those who have accounts in these banks that the National Bank guarantees to return all the money legally deposited. Reimbursement procedures will be made public in a future communique of the National Bank.
No such “future communique” was ever issued, because several days later North Vietnam’s forces overran Saigon and established a new, communist government. On May 1, 1975, the new government declared that “[a]ll ... banks ... will be confiscated and, from now on, managed by the revolutionary administration.” Eight days thereafter, on May 9, 1975, the new government announced that “[t]he activities of all banks are temporarily suspended until further notice. All banks must be placed under the management of the Saigon-Gia Dinh Military Management Committee banking committee.” The National Bank of Vietnam then reopened under communist rule and stated its readiness “to recover former debts incurred by banks through lending and to conduct settlement of debts, deposits, savings and all other sources of capital in the economy.” Towards that end, over the next several months the National Bank of Vietnam published, inter alia, the following policies:
With regard to previous deposits, securities and savings, all debtor banks, including all foreign banks, must accept responsibility for their liquidation and the submission of their records to the Vietnam National Bank. After settlement with banks, the Vietnam National Bank will conduct reviews and make known authorization to use deposits in accordance with production and commercial requirements and will pay out savings to workers and people according to new banking regulations.
[T]he national bank guarantees that the savings accounts of workers, who legitimately earn their income through their own efforts and labor, will gradually be paid to them.
As regards persons wanting to withdraw money on deposit at a bank ... while awaiting the settlement of accounts with the private banks, the National Bank of Vietnam will study and satisfactorily meet loan requests for reasonable business and production needs.
*1175As regards banks whose owners have fled the country, the national bank will inventory and re-evaluate their assets and settle their accounts in order to determine their ability to return the savings of account holders[.]
As for the comprador bourgeoisie who undertook speculation in wartime by relying on the U.S. Imperialists and colluding with the ringleaders in the puppet armed forces and administration and who fled abroad or still remain in the country, their entire property under state management will be confiscated completely or partly according to the gravity of their crimes.
Shortly after the communist takeover of Saigon, Trinh’s father was placed in a “reeducation” camp. Five years later, in early 1980, Trinh’s father was released, whereupon he notified Trinh of the joint savings account in Citibank’s former Saigon branch. Trinh then sought payment on that account at Citibank’s office in New York. Citibank refused to pay on the ground that, in its view, the National Bank of Vietnam is now responsible for the account. In response, Trinh brought this suit.
During the bench trial, Trinh’s evidence consisted primarily of his own testimony and that of a foreign currency expert. Trinh presented no expert testimony concerning Vietnamese law. Citibank’s evidence included the testimony of the customer service representative who opened Trinh’s account, the manager who helped evacuate Citibank personnel, a foreign currency expert, and an expert on Vietnamese law.
Applying Vietnamese law, the district court held in favor of Trinh. Trinh v. Citibank, N.A., 623 F.Supp. 1526 (E.D. Mich. 1985). In so doing, the district court relied heavily on Vishipco Line v. Chase Manhattan Bank, N.A., 660 F.2d 854 (2d Cir.1981), cert. denied, 459 U.S. 976, 103 S.Ct. 313, 74 L.Ed.2d 291 (1982), a factually analogous case wherein the Second Circuit held Chase Manhattan’s home office, in New York liable to depositors at its former Saigon branch. Tracking the Vishipco court’s line of reasoning, the district court first maintained (incorrectly, as heretofore stated in note 1) that Citibank never contended that under Vietnamese law the deposit agreement does not form a basis for recovery; the district court then went on to reject Citibank’s three affirmative defenses: force majeure as set out in Vietnam’s commercial law, assumption of Citibank’s liabilities by the National Bank of Vietnam, and confiscation of Trinh’s deposit by the communist government. Accordingly, the district court ordered Citibank to pay Trinh the dollar value of his account, with 19% interest.
I believe the district court misperceived Citibank’s position and as a result failed to recognize a critical distinction between this case and Vishipco. In Vishipco, “neither party invoked foreign law with respect to Chase’s basic obligations to its depositors and holders of certificates of deposit. Nor did Chase ever suggest that under Vietnamese law those obligations would not have formed a basis for recovery.” 660 F.2d at 860. Therefore, the Vishipco court cursorily construed the deposit contract under New York law and held that the contract rendered Chase liable to its Saigon branch depositors unless Chase could prove an affirmative defense making the contract unenforceable. Here, on the other hand, Citibank does indeed invoke Vietnamese law regarding its basic contractual obligations to its Saigon branch depositors and vigorously maintains that under Vietnamese law the deposit agreement between it and Trinh does not provide a basis for recovery, quite apart from the validity of its affirmative defenses. In other words, here Citibank argues that, as a threshold matter, the deposit agreement itself precludes recovery, whereas in Vishipco Chase apparently conceded that the deposit agreement created liability in the absence of some valid affirmative defense. Consequently, Vishipco is inapposite concerning the initial question of the scope of Citibank’s contractual obligations to Trinh un*1176der Vietnamese law.5 It is to that question, which is one of first impression, that attention must now be directed.
Citibank concedes that under the deposit agreement its domestic home office must rectify the Saigon branch’s failure to pay on Trinh's account if such failure results from financial mismanagement, insolvency, robbery, natural catastrophe, or virtually any other circumstance in which the rectification could still entail payment in Vietnam in piasters. Citibank maintains, however, that under the deposit agreement its domestic home office need not rectify the Saigon branch’s failure to pay on Trinh’s account if such failure results from political events making payment in Vietnam in piasters impossible. (The piaster ceased to exist shortly after the communist government was installed.) In other words, Citibank contends that the deposit agreement implicitly distinguishes between credit risk and sovereign risk, with Citibank bearing the former and Trinh bearing the latter. In Citibank’s view, that crucial distinction arises from certain provisions of the deposit agreement construed in light of the Vietnamese and American legal framework in which Citibank’s Saigon branch operated.
More precisely, Citibank points to the provisions of the deposit agreement limiting payment on the account to Vietnam and to Vietnamese currency and relieving Citibank’s Saigon branch of liability “for any loss or damage suffered or incurred by any depositor resulting from government orders, laws ... or from any other cause beyond its control.” According to Citibank, those clear and simple provisions, construed together, evince the parties’ intent to terminate Citibank’s responsibility to pay on a deposit where, as here, a governmental revolution precludes payment in Vietnam in piasters.
Moreover, in Citibank’s view, such an intent appears from not just the deposit agreement’s plain language, but also the background of Vietnamese commercial law. That law incorporates the doctrine of force majeure,6 which, according to uncontra-dicted expert testimony, requires that losses lie where they fall under the extraordinary circumstances present here. According to Citibank, in the absence of clear contractual language to the contrary, it should be assumed that the parties meant the deposit agreement to be consistent with Vietnam’s codification of force majeure.
Citibank also maintains that the parties’ intent may be inferred in part from American regulations governing foreign branch banking. Citibank notes that the Federal Reserve Board, the federal agency with authority over international banking operations of United States banks, has long encouraged foreign branches to operate, to a significant extent, as separate entities from their domestic home offices, and has permitted foreign branches to offer unusually attractive interest rates in exchange for the depositors’ acceptance of the risk of political upheaval. For example, during 1974 and 1975, deposits payable only at an office outside the United States were exempt from reserve requirements and from the then prevailing 5% cap on savings deposit interest rates. See 12 C.F.R. §§ 204.-2(t), 217.0(c) and 217.7(c) (1974 and 1975). Thus, Trinh’s account at Citibank’s Saigon branch paid 19% interest, 14% more than a comparable domestic dollar account. More*1177over, the Federal Reserve Board expressly warned banks that the reserve and interest exemptions would no longer apply to deposits in foreign branches if banks “entered into agreements ... with depositors that in effect guarantee payment of such deposits in the United States if the foreign branch is precluded from making payment.” 35 Fed. Reg. 2768 (1970), codified at 12 C.F.R. §§ 204.112(c) and 217.146 (1980).7 These regulations, Citibank contends, indicate that the parties meant to restrict payment on Trinh's account to Vietnam and Vietnamese currency under any and all circumstances in order to secure the legality of the 19% interest rate.8
In sum, Citibank argues that the deposit agreement itself and the legal framework in which the agreement was made reveal the parties’ intent to place on the depositor, Trinh, the risk of loss occasioned by a political catastrophe, such as the violent overthrow of South Vietnam and subsequent confiscation and nationalization of Citibank’s Saigon branch, that prevents Citibank from paying on the deposits in Vietnam in piasters.
In response, Trinh contends simply that pursuant to general banking principles under Vietnamese as well as American law, a domestic home office is always ultimately liable for the unpaid debts of its foreign branches, though he cites no Vietnam law to that effect. To support his contention, Trinh relies primarily on the famous Soko-loff cases,9 wherein the New York courts held the National City Bank of New York liable to its Petrograd branch depositors even though the Russian Revolution resulted in the confiscation and nationalization of the Petrograd branch. In so holding, the official referee10 in Sokoloff stated:
Where a bank maintains branches, each branch becomes a separate business entity, with separate books of account ... Nevertheless, when considered with relation to the parent bank, they are not independent agencies; they are, what their name imports, merely branches, and are subject to the supervision and control of the parent bank, and are in-strumentalities whereby the parent bank carries on its business, and are established for its own particular purposes, and their business conduct and policies are controlled by the parent bank, and their property and assets belong to the parent bank, although nominally held in the names of the particular branches. Ultimate liability for a debt of a branch would rest upon the parent bank.
Sokoloff v. National City Bank, 130 Misc. 66, 73, 224 N.Y.S. 102, 114 (1927) (citations omitted) (emphasis added). Moreover, Trinh observes that the Vishipco court construed the Sokoloff cases to mean that, as a matter of law, “[b]y operating in Saigon *1178through a branch rather than through a separate corporate entity, Chase accepted the risk that it would be liable elsewhere for obligations incurred by its branch ... U.S. banks, by operating abroad through branches rather than through subsidiaries, reassure foreign depositors that their deposits will be safer with them than they would be in a locally incorporated bank.” 660 F.2d at 863. Therefore, in Trinh’s view, Citibank’s home office in New York is legally bound to pay its Saigon branch depositors regardless of the nature of the circumstances rendering the Saigon branch unable to pay.
I agree with Citibank that Trinh must bear the loss of his savings deposit. I would so hold because I believe the deposit agreement so requires. In my view, the agreement’s clear and specific provisions limiting payment on the deposit to Vietnam and to Vietnamese currency, and relieving the Saigon branch of liability for damage to a depositor caused by governmental actions or causes beyond the branch’s control, create a legal relationship between Citibank’s domestic home office and its Saigon branch requiring the domestic home office to rectify the Saigon branch’s failure to pay on a deposit only if such rectification can occur in Vietnam and in piasters. In other words, the provision discharging the Saigon branch of liability serves to discharge the domestic home office of liability as well if the governmental action or other cause precludes payment in Vietnam in piasters. Here, the communist overthrow of South Vietnam and subsequent confiscation and nationalization of Citibank’s Saigon branch surely falls within the deposit agreement’s discharge-of-liability provision and prevents Citibank’s domestic home office from paying Trinh in Vietnam in piasters. Consequently, the deposit agreement calls for Trinh to suffer the loss and, in turn, Trinh’s action against Citibank must fail.
This interpretation of the deposit agreement is buttressed, as Citibank correctly points out, by the legal setting in which the Saigon branch operated. An expert on Vietnamese law testified without dispute that under Vietnamese law losses lie where they fall when extraordinary events such as those present here prevent a bank from honoring its obligation to pay on a deposit. If the parties had intended to bind themselves contractually to a different result by making Citibank’s domestic home office a complete guarantor of its Saigon branch, they would have so provided explicitly. Furthermore, in order to offer Trinh a 19% interest rate legally, Citibank’s Saigon branch had to refrain from making any guarantee of payment on Trinh’s deposit in the United States; and in order to offer Trinh a 19% interest rate wisely, Citibank’s Saigon branch had to allocate to Trinh the risk of political upheaval.
In addition, the Sokoloff cases simply do not stand for the broad general proposition that an American bank’s home office is always ultimately liable for the debts of its foreign branches. As perceptively and correctly construed by later New York cases, see Dougherty v. Equitable Life Assurance Soc’y, 266 N.Y. 71, 193 N.E. 897 (1934); Dougherty v. National City Bank, 157 Misc. 849, 285 N.Y.S. 491 (1935), the Sokoloff cases stand solely for the narrow principle that, under New York law, an American home office is liable for the debts of its foreign branches confiscated and nationalized by a revolutionary regime where the initial deposit is made in the United States in dollars. Thus, the Sokoloff cases have no application where, as here, Vietnamese law applies and the initial deposit was made in Vietnam in piasters.
Finally, Trinh is absolutely correct that “U.S. banks, by operating abroad through branches rather than through subsidiaries, reassure foreign depositors that their deposits will be safer with them than they would be in a locally incorporated bank.” Vishipco, 660 F.2d at 863. But that assurance of greater safety applies, under the deposit agreement, only to credit risks, not political risks. As Citibank’s amicus brief to the Vishipco court explained:
U.S. banks with overseas branches do accept many risks on behalf of their customers, but these risks are economic and not political. For example, Citibank, a debtor when it accepts deposits, assures its depositors that as an institution with massive resources it will stand behind each deposit at each branch, to the extent it can legally do so. Even if the *1179foreign branch burns down, is unprofitable, becomes insolvent, is robbed or defrauded, or physically disappears by reason of earthquake or other natural disaster, the bank as an institution will continue to operate. In this regard, Citibank and other large banks (domestic or foreign) do provide greater economic security than smaller, local banks.
Quoted in Logan and Kantor, Deposits at Expropriated Foreign Branches of U.S. Banks, 1982 U. of Ill. L. Rev. 333, 337 n. 9. In other words, Citibank’s Saigon branch provided to its depositors greater protection than did local banks because Citibank’s domestic home office undertook to stand behind its Saigon branch under virtually all circumstances, all circumstances except those in which the governmental actions prevented payment on deposits in Vietnam in piasters. Under the deposit agreement, the risk of those latter circumstances fell on the depositor.
For the foregoing reasons, I would vacate the judgment of the district court and remand for dismissal.
.Although the district court’s opinion states (623 F.Supp. at 1532) that "Citibank, in the present case, has never argued that, under the law of Vietnam, Trinh’s deposits do not equal a debt of the bank or form an underlying basis of recovery,” it is clear that Citibank did indeed take this position. "Statement of Defendant’s Claims and Defenses” in Final Pre-Trial Order, App. at 9. Moreover, the majority opinion properly recognizes that Citibank made this defense and addresses it.
. At the time, Trinh was a student residing in Michigan. He never returned to Vietnam and . became a United States citizen in 1979.
. The deposit agreement provided that "[w]ith-drawals from an account will be permitted only at Citibank’s place of business." (emphasis added). The deposit agreement specifically designated Citibank’s "place of business” as "28-30 Nguyen Van Thinh, Saigon 1, Republic of Vietnam."
. The Citibank branch manager’s testimony describing the confusion and fear leading to the escape from South Vietnam of the branch’s personnel, including its Vietnamese employees, is a harrowing story. It was necessary for the manager to portray the Vietnamese employees as his personal dependents in order to get them out of the country. These employees surmised that bankers would not be favorably treated by the incoming revolutionary government.
. The parties agree, as heretofore stated, that, because Citibank’s branch was located in Vietnam and because the account was opened and made payable in Vietnam and in Vietnamese currency, Vietnamese law governs the deposit agreements between Citibank's former Saigon branch and Trinh. See, e.g., Zimmermann v. Sutherland, 274 U.S. 253, 47 S.Ct. 625, 71 L.Ed. 1034 (1927); Dougherty v. National City Bank, 157 Misc. 849, 285 N.Y.S. 491 (1935); Restatement (Second) of Conflict of Laws § 188 (1971); Uniform Commercial Code § 4-102(2) (1977); Logan and Kantor, Deposits at Expropriated Foreign Branches of U.S. Banks, 1982 U. of Ill. L. Rev. 333, 341; Heininger, Liability of U.S. Banks For Deposits Placed in Their Foreign Branches, 11 Law & Pol’y Int’l Bus. 903, 944-50 (1969).
. Article 701 of the Vietnamese Commercial Code (V.C.C.) provided: 'The debtor does not have to pay damages if his violation or non-performance of contractual obligations is due to a fortuitous cause or a case of force majeure." Article 1206 of the V.C.C. provided: ‘The depositary is not liable for accidents or risks resulting from force majeure, unless previously he has been given notice to return the deposited object."
.The Federal Reserve Board went on to say: "In the Board’s judgment, the applicability of these exemptions from [reserve requirements and interest rate limitations] is limited to deposits in foreign branches as to which the depositor is entitled, under his agreement with the bank, to demand payment only outside the United States, regardless of special circumstances. Said exemptions are intended principally to enable foreign branches of U.S. banks to compete on a more nearly equal basis with other banks in foreign countries in accordance with the laws and regulations of those countries. A customer who makes a deposit that is payable solely at a foreign branch assumes whatever risk may exist that the foreign country might impose restrictions on withdrawals. When payment of a deposit in a foreign branch is guaranteed by a promise of payment at a banking office in the United States if not paid at the foreign office, the depositor no longer assumes such risk, but enjoys substantially the same rights as if the deposit had been made in a U.S. office of the bank. To assure the effectiveness of [reserve requirements and interest rate limitations] and to prevent evasions thereof, the Board considers that such guaranteed foreign-branch deposits must be subject to those regulations.” 35 Fed. Reg. 2768 (emphasis added).
. The majority opinion does not deal with the effect of the Federal Reserve regulation.
. Sokoloff v. National City Bank, 239 N.Y. 158, 145 N.E. 917 (1924), and Sokoloff v. National City Bank, 130 Misc. 66, 224 N.Y.S. 102 (1927).
. The Vishipco court incorrectly identified the referee as "Harrison Tweed, of the Milbank Tweed firm.” 660 F.2d at 863. The referee was actually Alfred R. Page. Harrison Tweed was the referee in Dougherty v. National City Bank, 157 Misc. 849, 285 N.Y.S. 491 (1935), a case quite damaging to the result reached in Viship-co. See discussion, infra.