Necessity and the COVID-19 Pandemic
Capital Markets Law Journal (2020 Forthcoming)
9 Pages Posted: 13 May 2020
Date Written: May 12, 2020
As the global economic downturn from the coronavirus worsens, many sovereign debtors will have to choose between paying creditors and fighting the virus. As of this writing in May 2020, official sector creditors have taken steps to grant relief to the poorest nations, but there is little sign that private creditors will coordinate to voluntarily grant relief. And that raises the likelihood that creditors who do not receive their payments will litigate. Customary international law, through the rarely applied doctrine of “necessity,” may provide sovereign debtors with some respite. This doctrine allows sovereigns to temporarily delay performance of international obligations when necessary to mitigate a grave and imminent danger to the populace.
Keywords: necessity, international law, COVID-19, sovereign debt
JEL Classification: F33, F34, K12, K22, K33
Suggested Citation: Suggested Citation