A/HRC/14/21 6. In addition, the independent expert undertook his first country missions to Norway (28–30 April 2009) and Ecuador (2–8 May 2009) at the invitation of the Governments of these countries. The main objective of the missions was to examine the unique roles of the two countries in the debate concerning illegitimate debt and to consider the effect, on the enjoyment of human rights, of the decisions by both countries concerning public debt, from the creditor and debtor perspectives. The official report on these missions is contained in the addendum to this report (A/HRC/14/21/Add.1). 7. For ease of reference, all United Nations documents related to the work of the independent expert, including reports to the General Assembly and the Council, interventions on foreign debt and human rights, and press statements, are available on the website of the Office of the High Commissioner for Human Rights at www2.ohchr.org/ english/issues/development/debt/index.htm. III. Vulture funds A. What are “vulture funds”? 8. The term “vulture funds” is used to describe private commercial entities that acquire, either by purchase, assignment or some other form of transaction, defaulted or distressed debts, and sometimes actual court judgements, with the aim of achieving a high return. In the sovereign debt context, vulture funds (or “distressed debt funds”, as they often describe themselves) usually acquire the defaulted sovereign debt of poor countries (many of which are heavily indebted poor countries (HIPCs)) on the secondary market at a price far less than its face value and then attempt, through litigation, seizure of assets or political pressure, to seek repayment of the full face value of the debt together with interest, penalties and legal fees.1 According to the African Development Bank (AfDB), vulture funds have averaged recovery rates of approximately 3 to 20 times their investment, equivalent to returns of 300 to 2,000 per cent.2 AfDB describes these recovery rates as “probably the highest in the distressed debt market”.3 At present, there are neither laws that limit the amount of interest or profit such funds can collect through litigation, nor regulatory frameworks that require disclosure of the amount such funds paid to purchase the debt. 9. It is difficult to state with precision how many lawsuits have been instituted by vulture funds. However, it is estimated that there have been over 50 lawsuits by commercial creditors against HIPCs and many of these are still outstanding.4 According to the World Bank and IMF, 54 court cases were instituted against 12 HIPCs between 1998 and 2008.5 1 2 3 4 5 GE.10-13156 See African Development Bank (AfDB), “Vulture funds in the sovereign debt context”. Available from www.afdb.org/en/topics-sectors/initiatives-partnerships/african-legal-support-facility/vulturefunds-in-the-sovereign-debt-context/. Ibid. Ibid. Examples include Greylock Global Opportunity registered in the British Virgin Islands and owned by Greylock Capital Management, which sued Nicaragua and was awarded US$ 50.9 million; FG Hemisphere registered in the United States, which sued the Congo and the Democratic Republic of the Congo and was awarded US$ 151.9 million and $81.7 million, respectively; Kensington International, registered in the Cayman Islands and owned by Elliott Management, which sued the Congo and was awarded US$ 118.6 million; and Donegal International registered in the British Virgin Islands (ownership unclear), which sued Zambia and was awarded US$ 15.4 million. International Development Association (IDA) and IMF, “Heavily Indebted Poor Countries (HIPC) Initiative and Multilateral Debt Relief Initiative (MDRI) – status of implementation” (2008), para. 38. 5