This book tackles the challenge of holdout creditor disruption of sovereign debt restructuring, where creditors reject collective agreements to pursue full loan recovery in domestic courts.
Critically examining the contemporary statutory and contractual approaches to sovereign debt restructuring, the book presents their usefulness and limitations, including the potential major impact of the doctrine of merger in rem judicatam. It proposes the duty of good faith (which is generally implied under US law, implied in certain categories of contract under English law, and widely recognized globally) applied in the context of sovereign debt as a relational contract, as a robust legal approach to combating such disruptions in domestic courts. Through rigorous analysis of case law and treatises, the book argues that sovereign debt contracts are relational contracts, invoking heightened good faith and equity obligations. With in-depth analysis of the contents and judicial applications of the duty of good faith in English and New York jurisprudence, it demonstrates how holdout actions violate good faith and proffers a judicial approach, based on the duty of good faith, to sovereign debt restructuring as a viable alternative to current statutory and contractual approaches.
This book will be of interest to practitioners, researchers, and policy makers in contract law, finance law, relational contract theory, good faith, and sovereign debt.
Table of Contents:
Introduction
1. Sovereign Debt and Holdout Disruption
2. The Promises and Limitations of Contemporary Approaches
3. The Relational Contract Approach
4. Sovereign Debt as a Relational Contract
5. A Comparative Overview of the Doctrine of Good Faith under English and New York Laws
6. Good Faith and Relational Contract in Sovereign Debt Context
7. Good Faith and Relational Contract in Holdout Adjudication
Conclusion
About the Author :
Francis Chukwu is Senior Counsel at the Multilateral Investment Guarantee Agency, the political risk insurance and credit enhancement arm of the World Bank Group. Prior to joining MIGA, he was an international project finance lawyer at Clifford Chance, a research officer at the International Monetary Fund, and a litigation lawyer at Aluko & Oyebode. Francis holds a PhD in law from the University of Amsterdam, an LLM from New York University School of Law, and an LLB from the University of Nigeria. Francis is also an adjunct professor of law at Georgetown University Law Center.
Review :
Few aspects of contract law have broader social and economic ramifications than the law governing sovereign debt restructuring. Francis Chukwu’s original approach to the issue of holdouts has the potential to reshape both litigation and market practices. Practitioners, policymakers and scholars will all have to engage with his argument.
Kevin Davis, Beller Family Professor of Business Law and Faculty Director, Hauser Global Law School, New York University School of Law.
In this highly innovative account, Francis Chukwu not only shows why sovereign debt contracts ought to be regarded as relational contracts and what the legal-doctrinal implications of this finding are. He also elucidates a broader issue: why contemporary private law, in the context of pervasive economic interdependence, needs to subject some of its basic principles to the test of time if it is to remain equitable also in the 21st century. Highly recommended!
Marija Bartl, Professor of Transnational Private Law, University of Amsterdam.
This book offers a bold interpretation of the contract law of sovereign debt restructuring. If followed, it could make an important difference for countries in the Global South in their legal struggles with vulture funds and other holdout creditors from the Global North.’
Martijn W Hesselink, Professor of Transnational Law and Theory, European University Institute, Florence
