The Path Towards an International Public Policy for Sovereign Debt Contracts
Brazilian Yearbook of International Law, vol IX, 2014, pp. 122-144.
24 Pages Posted: 28 Mar 2014 Last revised: 31 Dec 2014
Date Written: March 20, 2014
Recent times have been rich in events highlighting the shortcomings of mechanisms for dealing with sovereign debt crises, especially when they involve private creditors. Both the Greek financial debacle and the spate of litigation arising from Argentina’s 2001 default have exposed the obstacles to both the successful implementation of restructuring plans and the attempts to block the legal actions brought by private creditors not willing to participate in the restructuring of sovereign debt. Given this seeming disarray and the impediments to the establishment of sovereign insolvency proceedings, the loan contract emerged as one of the most suitable instrument to ensure an orderly resolution of sovereign insolvency issues. In this context, it seems reasonable to examine the possible emergence of an “international public policy” for sovereign debt, the cornerstone of which would be the loan contract concluded between the State and its creditors.
Keywords: Collective Action Clauses (CACs), European Stability Mechanism (ESM), International pubic policy, Sovereign debt, Vulture funds
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