Debt Relief to Poor Countries: Rules v. Discretion
Butterworths Journal of International Banking and Financial Law, May 2010
9 Pages Posted: 20 May 2010 Last revised: 2 Jan 2011
Date Written: May 20, 2010
The UK’s Debt Relief (Developing Countries) Act 2010 aims to ensure that UK courts neither give nor enforce a judgment allowing recovery against Heavily Indebted Poor Countries (‘HIPC’) on covered debts exceeding the amount calculated as sustainable under the HIPC Initiative.
Some have objected to the legislation on the grounds that it interferes with creditors’ existing contractual rights and could threaten London as a financial centre by limiting legitimate trading in sovereign debt. The article gives an overview of the Act and explains why the Act closes an important loophole for the effective implementation of multilateral debt relief.
Keywords: debt relief, HIPC, holdout, sovereign debt restructuring, collective action
JEL Classification: K33, 010, F34, K12
Suggested Citation: Suggested Citation