A/HRC/41/51
enjoyment of economic, social and cultural rights should therefore be systematically
assessed.
89.
The Advisory Committee recommends that the Human Rights Council:
(a)
Maintain the issue of vulture funds and human rights on its agenda in
order to assess the impact of their activities on economic, social and cultural rights
and the right to development, and support further initiatives aimed at identifying and
curtailing illegitimate activities by vulture funds;
(b)
Explore further ways of mainstreaming human rights in the context of
debt-restructuring workouts and of operationalizing processes aimed at assessing and
monitoring the negative impact of the activities of vulture funds on the full enjoyment
of economic, social and cultural rights and on the realization of the Sustainable
Development Goals;
(c)
Commend the work of the African Legal Support Facility, and call upon
States to support the expansion of this mechanism so as to assist developing countries
in their disputes with vulture funds and other similar speculative ways of
manoeuvring on financial markets;
(d)
Adopt a new resolution, following the examination of the present report,
entrusting the Advisory Committee with the follow-up to this issue, with a view to
making concrete recommendations to States and relevant stakeholders. A further
study reviewing relevant national legislation and case law, as well as good practices,
would help States in the process of establishing an adequate legal framework.
90.
The Advisory Committee recommends that Member States:
(a)
Enact legislation aimed at curtailing the predatory activities of vulture
funds within their jurisdictions. Domestic laws should not be limited to heavily
indebted poor countries but should cover a broader group of countries and apply to
commercial creditors that refuse to negotiate any restructuring of a debt. Claims that
are manifestly disproportionate to the amount initially paid to purchase a sovereign
debt should not be considered. The laws in Belgium and the United Kingdom provide
valuable examples for other States in drafting national laws aimed at limiting the
practices of vulture funds;
(b)
Adopt measures aimed at limiting disruptive litigation by vulture funds
in their jurisdictions. National courts or judges should not give effect to foreign
judgments or conduct enforcement procedures in favour of vulture funds that are
pursuing a disproportionate profit. It is a good practice to limit the value of the claims
of vulture funds to the discounted price originally paid for the bonds;
(c)
Enhance and promote transparency by ensuring that the owners and
shareholders of vulture funds are disclosed and made subject to appropriate taxation.
Transparency on sovereign debt in the secondary market should be particularly
ensured and courts and other relevant national authorities must have access to all
relevant documents and information on the amounts concerned and the identity of
creditors;
(d)
Ensure that adjudication bodies, including the International Centre for
Settlement of Investment Disputes and the Permanent Court of Arbitration, integrate
into their practices the duty of arbitrators to assess at a preliminary stage the bona
fides of vulture fund claims, as well as the standing of the claimant, by requiring that
the details of the debt be disclosed;
(e)
Ensure that the principle of bona fides is adequately reflected in national
legislation and applied by the domestic courts in relation to litigation concerning
sovereign debt restructuring processes by ensuring that abusive creditors do not enjoy
better treatment than cooperative creditors acting in good faith.
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