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1 - Setting the Scene
from Introduction
Kei Nakajima, University of Tokyo
Book:

The International Law of Sovereign Debt Dispute Settlement

Published online:

15 September 2022

Print publication:

22 September 2022, pp 3-20
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Summary

This study explores the fragmented contemporary international legal instruments and practice relevant to sovereign defaults and has examined the question of whether and to what extent these instruments and practice can be reconceptualised as a regulatory framework for sovereign debt restructuring.

Conclusion
from Part II - Regulation through Treaty and Arbitration
Kei Nakajima, University of Tokyo
Book:

The International Law of Sovereign Debt Dispute Settlement

Published online:

15 September 2022

Print publication:

22 September 2022, pp 284-288
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Summary

This study has pursued a balance between bondholder protection and respect for sovereign debt restructuring at various stages of litigation and arbitration proceedings. An appropriate balance inevitably depends on the context and circumstances of specific cases and cannot, by its nature, be articulated in a precise manner. Instead, the present study has pursued a framework within which an appropriate balance may be explored and attained in specific cases. Such a framework is constructed by applicable contract, statutory and treaty provisions to be interpreted in a manner that certain deference is paid to debtor sovereigns’ policy decision-making during debt restructuring and that the chance of checks and balances by courts or tribunals is ensured.

Kei Nakajima
Published online:

15 September 2022

Print publication:

22 September 2022
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The first two decades of the twenty-first century witnessed a series of large-scale sovereign defaults and debt restructurings, in which sovereigns struggled to negotiate with recalcitrant bondholders, particularly hedge funds. Also, the outbreak of the COVID-19 pandemic in 2020 heralded a bleak financial outlook for many developing and emerging market countries, requiring sovereign debt restructuring in times of great macroeconomic uncertainty. Given the absence of a multilateral mechanism for sovereign debt restructuring equivalent to domestic corporate bankruptcy system, however, defaulted sovereigns often suffer from holdout litigation wrought by bondholders. This book proposes ways in which such legal actions could be regulated without the undue expense of bondholders' remedies by exploring the mechanism of balancing bondholder protection and respect for sovereign debt restructuring at various stages of litigation and arbitration proceedings.