A/HRC/33/54
judgment by a court in the United Kingdom and foreign judgments enforceable in the
United Kingdom, as well as to arbitral awards.51 However, its scope is limited to HIPCs.
43.
The aim of the law is to ensure that courts in the United Kingdom neither render nor
enforce a judgment that allows recovery of covered debts of those countries in excess of the
amount calculated as sustainable debt under the HIPC Initiative. The creditor may not
recover more than the existing debt, even if the debt is renegotiated or the subject of a new
agreement. While there is no provision for cancellation of debt, enforcement is limited to
the recoverable amount under the existing debt, irrespective of the law applicable to the
debt or claim.52
Other draft legislation
44.
An amendment introduced to a draft bill related to transparency, corruption and the
modernization of the economic sphere was recently discussed in France. The proposed new
amendment aims at protecting States facing a sovereign default and that are beneficiaries of
official development assistance. Of note is that vulture funds are required to obtain an
authorization from the court before proceeding to seizure for debt recovery.53 The draft
supplements another proposal aimed at guaranteeing immunity from seizure to certain State
properties.54
VI. Forging international consensus
45.
A growing consensus has emerged in recent years on the need to curb the activities
of vulture funds. A number of States have expressed support for international action to
protect HIPCs in particular from the activities of vulture funds as well as broad support for
the establishment of an international mechanism for orderly debt restructuring.
46.
In a meeting of the Group of Eight held in May 2007, finance ministers and
governors of central banks expressed their concern about the problem of aggressive
litigation against HIPCs. While welcoming the steps already taken by the Paris Club to
address this problem, they urged all sovereign creditors not to sell claims on those
countries.55
47.
The same year, Commonwealth finance ministers affirmed that they were
particularly alarmed at the lawsuits filed against HIPCs by some commercial creditors,
especially vulture funds, and emphasized the need for concerted international action to
address this problem. They urged Governments to introduce legal protection to ensure that,
as a minimum, debt relief was provided on terms equivalent to the HIPC framework. 56
51
52
53
54
55
56
Ibid., section 5.
M. Waibel, “Debt relief to poor countries: rules v. discretion”, Butterworths Journal of International
Banking and Financial Law (June 2010), available from
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1612242.
At the time of writing, the law was being discussed by the Senate. See A. Paredes-Vanheule, “France
to restrict ‘vulture funds’ claims”, Investment Europe, 3 June 2016.
Projet de loi relatif à la transparence, à la lutte contre la corruption et à la modernisation de la vie
économique, arts. 24 and 24 bis.
“Statement of G7 Finance Ministers and Central Bank Governors”, Washington, D.C., 19 October
2007.
Ministerial statement adopted at the Commonwealth HIPC Ministerial Forum.
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