Droit des affaires - Insolvabilité des États et dettes souveraines -1 - 126

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Although a widely accepted deﬁnition of vulture funds is hard to craft, 81 this phrase is usually used in connection with investment funds which have bought sovereign debt on the secondary market for a fraction of its face value. Pushed in part by a very active civil society, some countries have examined the possibility of introducing speciﬁc legislation curtailing the rights of such sovereign creditors. As of now, only individual States seem to have undertaken action. Although some of the initiatives discussed at national level to curtail the actions of so-called vulture funds, were not (yet) adopted, it is worth also reviewing them one by one in order to identify their key features.

A. TWO ABORTED ATTEMPTS: FRANCE AND THE UNITED STATES 1) A ﬁrst attempt in France
A ﬁrst country where the actions of ’vulture’ funds was put on the agenda is France. In August 2007, a bill was introduced in Parliament, whose aim it was to “lutter contre l’action des fonds ﬁnanciers dits ’fonds vautours’”. 82 This text was modeled on the French version of the Champerty Act: while Article 1699 of the French Civil Code gives the debtor of a ’litigious’ 83 right the possibility to be released from the debt by reimbursing the assignee for the actual price of the assignment, together with the expenses, fair costs and interests, 84 the proposed legislation would grant the French judge discretionary power to order or refuse to order payment of a debt owed to a creditor of a foreign sovereign. 85 This discretion, quite unusual for the French tradition, was only curtailed by the
81. See the attempt in the US bill discussed hereinafter: according to section 3.2, the term ’vulture creditor’ means “ any person who directly or indirectly acquires defaulted sovereign debt at a discount to the face value of the obligation so acquired...”. 82. It had already been introduced in June 2006 (bill nr. 3214). 83. According to Art. 1700 of the Code, “La chose est censée litigieuse dès qu’il y a procès et contestation sur le fond du droit” (translation: “A matter is deemed litigious as soon as there is a case and controversy as to the merits of the right”). 84. Art. 1699 reads as follows: A person against whom a litigious right has been assigned may have himself released by the assignee by reimbursing him for the actual price of the assignment with the expenses and fair costs, and with interest from the day when the assignee has paid the price of the assignment made to him / “Celui contre lequel on a cédé un droit litigieux peut s’en faire tenir quitte par le cessionnaire, en lui remboursant le prix réel de la cession avec les frais et loyaux coûts, et avec les intérêts à compter du jour où le cessionnaire a payé le prix de la cession à lui faite”. 85. Unlike in the regime of Article 1699, the discretionary power granted to the court would apply even when the underlying debt is not ’litigious’.

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

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