8 - Checks and Balances at the Stage of Merits

Summary

Finally, the checks and balances of sovereign debt restructuring by investment tribunals are also implemented as a matter of the interpretation of the substantive provisions. Given that investment arbitral jurisprudence has incorporated the doctrine of margin of appreciation, the study has concluded that a deferential review of policy decision-making by debtor sovereigns is available and appropriate for arbitral tribunals. Concretely, the arbitral jurisprudence on the provisions providing standards of protection and defence on merits may afford a balancing exercise that enables safeguarding the legitimate policy of debt restructuring without sacrificing bondholder protection.