Droit des affaires - Insolvabilité des États et dettes souveraines -1 - 114

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courts were certainly also sensitive to the fact that defaulting on debtors payable in international jurisdictions is not considered to be a sovereign act worthy of judicial deference. In another important development for sovereign creditors, courts also found that the champerty defense, which prohibits litigating on a claim purchased exclusively for the purpose of instituting court proceedings, 22 did not prevent creditors from claiming payment from a sovereign in case of default even when the debt was bought on the secondary market. 23 24 Comity remained a potential obstacle to private creditors’ litigation in US courts, albeit not a strong one. The Allied Bank litigation once again illustrates the evolution of courts. In its ﬁrst decision in this case, the Second Circuit agreed that comity should beneﬁt the defaulting sovereign. 25 This decision was certainly inﬂuenced in substance by the position of the US government, which had indicated its support for Costa Rica’s attempt to restructure its debts. In another decision in the same case, the same court of appeals reversed, however, rejecting the argument that comity should bar the suit. 26 According to the Court, “[t]he Costa Rican government’s unilateral attempt to repudiate private, commercial obligations is inconsistent with the orderly resolution of international debt problems”. 27 In granting the creditors’ motion for summary judgment, the Court added that Costa Rica’s decision was “... contrary to the interests of the United States”. 28
22. The Champerty doctrine can be found in most state laws in the United States, see e.g. section 489 of the New York Judiciary Law which prohibits the purchase of a claim with the intent and purpose of bringing action or proceedings on the claim. 23. See Elliott Associates LP v The Republic of Peru 194 F.3d 63 (2d Cir. 1998). In ﬁrst instance, the district court had held that the Champerty doctrine barred claims brought by the creditor against Peru (12 F. Supp. 2d 328 (S.D.N.Y. 1998). In reversing this decision, the Second Circuit Court adopted a narrow reading of the Champerty defense, holding that this defense did not apply if the creditor intended, when purchasing the debt, to be paid in full and only to resort to litigation in the absence of payment. 24. It was reported that the New York legislature modiﬁed its law to eliminate the champerty defense for any dispute relating to debt exceeding USD 500.000 and this following a request made by distressed debt investors – see J. I. BLACKMAN and R. MUKHI, “The Evolution of Modern Sovereign Debt Litigation: Vultures, Alter Egos and Other Legal Fauna”, Law & Contemp. Problems, 2010, vol. 73, (47), 54. 25. Allied Bank I, 733 F.2d 23 (2nd Cir. 1984). 26. Allied Bank II, 757 F.2d 516 (2nd Cir. 1985). 27. 757 F.2d 516 at 522. 28. The difference between the Court’s position in 1984 and 1985 can be explained by the amicus brief submitted by the Justice Department when the Court agreed to rehear the case. The Department explained that it only wished to encourage the cooperative restructuring of sovereign debt if the foreign sovereign did not call into question the validity and enforceability of the original obligations, something which Costa Rica had not done. In the same line, the New York Clearing House Association also ﬁled an amicus curiae brief urging the court to enforce the rights of commercial banks on sovereign debt.

Droit des affaires - Insolvabilité des États et dettes souveraines -1

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