cover image: A model-law approach to restructuring unsustainable soverign debt /

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A model-law approach to restructuring unsustainable soverign debt /

24 Aug 2015

The Contractual Approach Is Inadequate One of the main impediments is that the existing “contractual” approach to sovereign debt restructuring — the use of so-called collective action clauses (CACs) — is insufficient to solve the holdout problem. [...] The A Proposed Model Law political economy of treaty making, however, makes that type The Schwarcz Article proposes a Sovereign Debt Restructuring of multilateral approach highly unlikely to succeed in the near Model Law (see the Appendix). [...] The increase should not exceed the cost increase resulting from main role of the supervisory authority is administrative and workable CACs being included in all debt contracts, which has non-discretionary: to fact-check information and to oversee the been the ideal goal of the contractual approach to sovereign debt creditor voting process. [...] This Law applies where, by contract or otherwise, (a) the law (or under any other law that is substantially in the form of this of [this jurisdiction3] governs the debtor-creditor relationship Law) during the past [ten] years, (b) needs relief under this Law between a State and its creditors and (b) the application of this to restructure claims that, absent such relief, would constitute Law is inv [...] A Plan shall become effective and binding on the State and international arbitration rules of (name of neutral international its creditors when it has been submitted by the State and agreed arbitration body)] [the rules of the International Centre for to by each class of such creditors’ claims designated in the Plan Settlement of Investment Disputes/ International Centre for under Article 6(1).
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Authors

Schwarcz, Steve L

Pages
8
Published in
Ottawa, Ontario

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