Droit des affaires - Insolvabilité des États et dettes souveraines -1 - 155

Les fonds vautours

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If one should not overestimate the power of creditors in general and of vulture funds in particular, it does not mean that sovereign debt litigation is irrelevant. 204 Notwithstanding recent evolutions, which have decreased the effects which creditor litigation could have on sovereign defaults, it is indubitable that actions by creditors may have adverse effects on the sovereign debtor. Actions by creditors may force debtors to incur signiﬁcant costs, in particular legal fees associated with defending claims. Further, substantial time must be devoted to managing actions undertake by creditors. 205 The case of the Democratic Republic of Congo perfectly illustrates what a sovereign creditor must do in order to obtain payment of its debts and what the sovereign debtor will endure if it does not pay. The DRC has been dragged in court in various jurisdiction by a venture fund, FG Hemisphere, which has spawned a number of proceedings against the Republic, for a period of time extending over many years. It seems that FG Hemisphere’s claim goes back to a credit agreement entered in 1980 by the DRC (then Republic of Zaire) and its stateowned electric company Société Nationale d’Électricité (’SNEL’) with Energoinvest, an engineering company established in the former Yugoslavia, to ﬁnance the construction of an electric power transmission facility in Zaire. After the DRC had failed to repay what it owed under this agreement, Energoinvest obtained
June 2009, at p. 3). See also the EMTA response to Debt Relief Consultation: “Litigation against HIPCs is already rare and becoming rarer, and would not appear to pose a signiﬁcant threat to future debt relief initiatives.” (submission by EMTA, HM Treasury consultation, ’Ensuring effective debt relief for poor countries’, February 2010, at p. 5). See also the 2009 Status of Implementation for the Heavily Indebted Poor Countries (HIPC) Initiative and Multilateral Debt Relief Initiative (MDRI), under the umbrella of the IMF and the IDA (Sept. 15, 2009), at p. 19, § 24). The Report nonetheless indicates that “While recent developments are encouraging, the threat of new litigation remains” (at § 25). 204. Porzecanski has argued that attempts by private creditors to obtain payment by litigation when a sovereign debtor defaults, is a “fruitless endeavor” (A. C. PORZECANSKI, “From Rogue Creditors to Rogue Debtors: Implications of Argentina’s Default”, Chicago J. Intl. L., 2005, vol. 6, 311 at p. 326). In his view, the few victories obtained by private creditors are “pyrrhic victories” (“When Bad Things Happen to Good Sovereign Debt Contracts: the Case of Ecuador”, MPRA Working Paper, February 2010, at p.17). He also writes that “rogue sovereign debtors, rather than rogue private creditors are the ones that pose the greatest threat to the integrity and efﬁciency of the international ﬁnancial architecture” (ARTURO C. PORZECANSKI, “From Rogue Creditors to Rogue Debtors: Implications of Argentina’s Default”, Chicago J. Intl. L., 2005, vol. 6, 311 at p. 331). 205. The very relative importance of court action and the weakness of the creditors, does not mean that courts do not have any role to play in sovereign debt restructuring. The example of Argentina and the treatment of his restructuring by US courts, shows that courts may have some inﬂuence on restructuring. As Miller and Thomas have argued (M. MILLER & D. THOMAS, “Sovereign Debt restructuring: the Judge, the vultures and creditors rights”, 2006), courts may exert some inﬂuence notably by balancing the rights of the creditors and the interest of a successful restructuring. In the Argentinian case, judge Griesa apparently carefully calibrated his interventions in order to nudge the debtor to make an offer while preserving the creditors’ rights. This is most apparent in the ﬁrst ruling given by judge Griesa, in which he granted summary judgments in favor of the creditors, while staying the enforcement (EM Ltd. v. The Republic of Argentina 2003 WL 22120745 (S.D.N.Y. Sept. 12, 2003). Whatever truth there is in this analysis, it remains that creditors have as such very little impact on sovereign restructuring.

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

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