Droit des affaires - Insolvabilité des États et dettes souveraines -1 - 164

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While it seems clear that the limitations imposed by the Belgian Act only amounts to regulation of property rights, 239 the nature of the ’interference’ brought by the UK Debt Relief Act with private property of sovereign creditors is subject to debate. In its Explanatory Note, the Treasury explained that the debt reduction which private creditors would undergo as a result of the operation of the law would more likely be a ’control of use’ than a ’deprivation’ of possessions. 240 This was challenged by representatives of the sovereign creditors who argued, during the consultation which was launched prior to the adoption of the law, that as the creditors would lose a substantial part of their debts, the act would result in a de facto deprivation. 241 Looking at the English legislation, one could hesitate as to the proper characterization of the legislative intervention. If one considers the net effect of the English Act, it is not unreasonable to accept that the creditor is deprived of at least part of its property. To be sure, the operation of the Debt Relief (Developing Countries) Act does not amount to formal expropriation, since there is no formal transfer of ownership. Nevertheless, the prohibition imposed to courts to render a judgment for the full value of the claim renders the creditor’s title to its claim effectively useless, at least for the part for which no title may be obtained. In that sense, there is deprivation of property, even though the formal title to the sovereign debt continues to rest with the creditor. The European Court has long made clear that Article 1 also applies to de facto expropriation. 242 The adverse impact on the title to claim is undeniable. In effect, this impact amounts to the extinction of part of the legal rights enjoyed by the creditor, at least before the courts in England. What is a claim indeed worth if the legislator provides that it cannot be enforced in court? In any case, the question of the proper characterization of the Debt Relief Act does not seem decisive. Indeed, the European Court has itself blurred the line between deprivation, control of use 243 and the general rule barring interference
239. ’Control of use’ to use the language of the Convention. 240. Explanatory Notes, Debt Relief (Developing Countries) Bill, 2010, at p. 9, para 42. 241. See e.g. the comments made by Dechert LLP in its submission, HM Treasury consultation, ’Ensuring effective debt relief for poor countries’, February 2010, at p. 13, § 45. 242. Sporrong and Lönnroth v Sweden Series A no 52 (1983) 5 EHRR 35, at § 63 (ECtHR 23 Sept. 1982). 243. Most famously in its judgment in the Pye case, where the Court held that the operation of the English law rule whereby property of registered land could pass on to those who occupy the land for a long period (the so-called ’adverse possession’), should be investigated on the basis that it amounts not to deprivation but to control over the use of property (JA Pye (Oxford) Ltd. and JA Pye (Oxford) Land Ltd. v. UK (2008) 46 EHRR 1083 (ECtHR – 30 August 2007). See in general the comments by M. PELLONPAA, “Reﬂections on the notion of ’deprivation of possessions’ in Article 1 of the First Protocol of the European Convention on Human Rights”, in P. MAHONEY et al. (eds.), Protecting Human Rights: the European Perspective. Studies in Memory of Rolv Ryssdal, Carl Heymanns, 2000, 1087 ff.

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

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