international human rights law review 3 (2014) 159-177 brill.com/hrlr
Review Essay
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The Emergence of an International Law of Sovereign Debt and Insolvency
Carlos Espósito, Yuefen Li and Juan Pablo Bohoslavsky (eds.), Sovereign Financing and International Law: The unctad Principles on Responsible Sovereign Lending and Borrowing, Oxford: Oxford University Press, 2013, ISBN: 978-0199674374, pp 403. Rosa Maria Lastra and Lee Buchheit (eds.), Sovereign Debt Management, Oxford: Oxford University Press, 2014, ISBN: 978-0199671106, pp 487. Krista Nadakavukaren Schefer (ed.), Poverty and the International Economic Legal System: Duties to the World’s Poor, Cambridge: Cambridge University Press, 2013, ISBN: 978-1107032743, pp 453. Michael Waibel, Sovereign Defaults before International Courts and Tribu nals, Cambridge: Cambridge University Press, 2011 (4th printing, 2013), ISBN 9780521196994, pp 366. Odette Lienau, Rethinking Sovereign Debt: Politics, Reputation and Legitimacy in Modern Finance, Cambridge MA: London: Harvard University Press, 2014, ISBN: 978-0674725065, pp 331. Yvonne Wong, Sovereign Finance and the Poverty of Nations: Odious Debt in International Law, Cheltenham: Northampton MA: Edward Elgar, 2012, ISBN: 978-0857935021, pp 176. Sabine Michalowski, Unconstitutional Regimes and the Validity of Sovereign Debt: A Legal Perspective, Aldershot: Burlington VA: Ashgate, 2007, pp 240. Eugenio A Bruno, Sovereign Debt and Debt Restructuring: Legal, Financial and Regulatory Aspects, London: Globe, Law and Business, 2013, ISBN: 190578399X, pp 225.
© koninklijke brill nv, leiden, 2014 | doi 10.1163/22131035-00301002
1 Introduction
The purpose of this review essay is to undertake a critical review of these seven books and in the process assess to what degree a lex specialis international law regime has developed regarding sovereign debt and insolvency.1 It was rather fortunate that the bulk of monographs and edited collections on this issue were written in the last three years, albeit I also included one published in 2007, but alas there are few others that did not make it in this review, princi- pally for reasons of availability or the limited size of this review.2 The notion of sovereign debt has been around since debt, which appeared long before the modern states, ultimately met up with them. It is clear (or per- haps not) that sovereign debt is a matter regulated by international law on the premise that states contract on their own behalf, guarantee loans for themselves and others, resolve balance-of-payments issues through intergov- ernmental institutions, such as the International Monetary Fund (imf), as well as because much of the impact of foreign debt is directly related to other international obligations particularly in the field of human rights. The fact that the United Nations (un) have appointed an independent expert to study the impact of foreign debt on human rights has gone largely unnoticed,3 largely because there exists a presumption that the field of sovereign debt is somehow fragmented from other spheres of international law, such as human rights and the environment. This approach echoes the similar trend in the field of international investment arbitration whereby investment tribunals are not
1 I am not suggesting that the lex specialis character, if any, of sovereign debt gives rise to the application of a distinct set of human rights (particularly a watered-down version) or that the sovereign lending dimension should trump its human rights counterpart. That any of these outcomes may in fact exist under current state practice is a distinct reality, however, irrespective of this author’s strong feelings to the contrary. For a judicial discussion of lex specialis regimes in international law, see Legality of the Threat or Use of Nuclear Weapons, (1996) ICJ Reports, para 25. 2 Most notably, PS Kenadjan, KA Bauer and A Cahn (eds.), Collective Action Clauses and the Restructuring of Sovereign Debt (de Gruyter, 2013); L Ndikumana and J Boyce, Africa’s Odious Debts: How Foreign Loans and Capital Flight Bled a Continent (Zed Books, 2011), although not dealing with international law as such, the arguments used here could certainly aid interna- tional legal scholarship; S Bonilla, Odious Debt: Law and Economics Perspective (Gabler Verlag, 2011); H Schier, Towards a Reorganisation System for Sovereign Debt (Brill, 2007); R Olivares- Caminal, The Legal Aspects of Sovereign Debt Restructuring (Sweet & Maxwell, 2009); A Rieffel, Restructuring Sovereign Debt: The Case for Ad Hoc Machinery (Brookings Institution Press, 2003). 3 His work has now given rise to the Guiding Principles on Foreign Debt and Human Rights, in un Doc A/HRC/20/23 (10 April 2011).
international human rights law review 3 (2014) 159-177