The rights and remedies available to injured parties in the event of a sovereign default : a legal, historical and comparative analysis

Abstract

This is work examines a prevailing notion that, under public international law, there exist no remedies that are available to injured parties in the event of a sovereign default event. It is a systematic and methodical examination of facts of law that arise from statute and from jurisprudence across time and geographical regions. The work begins by introducing the subject behind the present inquiry, its motivation and objective. This work proceeds by locating the subject of inquiry within the broader historical, economic and political backdrop. Next, the anatomy of the sovereign debt obligation is examined. The Sovereign Debt obligation is then counterpoised with the notion of principle of legal equality of nations under public international law. The following chapter presents the main current legal instruments that their limitations including some proposed remedies. This is followed by a thorough analysis of a selection of some the leading cases in sovereign debt litigation. These cases have been selected for their thematic importance and examine the interrelationship between the notion of the sovereign default, the guarantee and the ‘gold clause’, the notion of jurisdiction, the notion of acts of state and sovereign immunity from legal action, sovereign immunity from attachment and execution, the ‘pari passu’ clause, equitable treatment, and the rights of hold-out creditors, vulture funds and the ‘champerty defence’, the right to peaceful enjoyment of possessions, and vicarious liability of sovereign states, among others. In the final chapter, an informed answer the original question is presented. This answer posits that that even under the current order of public international law, mitigating and remedial measures do exist to manage better sovereign debt crises. This chapter also identifies areas where - notwithstanding the great strides forward, some measure of legal uncertainty still lingers and points towards other avenues of inquiry where further research and legislation can do a great deal of good.