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Disputation: Intercreditor equity in sovereign debt restructuring

Master of Laws Astrid Iversen at Department of Private Law will be defending the thesis Intercreditor equity in sovereign debt restructuring for the degree of Ph.D.

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Astrid Iversen

Photo: UiO

There is a limited number of seats at the disputation. There will therefore be registration in advance and you find the form HERE  Deadline for registration is 20th of September.

Please note that the disputation will be streamed and some of the seats behind the candidate will be visible for those who are watching.

Participate at the disputation here (opens at 11:15am September 22nd 2020)

A digital version of the thesis can be ordered by e-mail: k.h.paulsen@jus.uio.no

Trial lecture - time and place

Adjudication committee

  • Professor Freya Baetens (leader)
  • Dr. Mamadou Hébié (1. opponent)
  • Judge Awn Shawkat Al-Khasawneh (2. opponent)

Chair of defence

Vice dean Vibeke Blaker Strand 

Supervisors

  • Professor Mads Andenæs 
  • Professor Michael Waibel 

Summary

Sovereign debt restructuring – a crisis resolution tool 
As is the case with private individuals and corporate debtors, states sometimes default on their payment obligations. In contrast to corporations and private individuals, a state facing solvency problems or defaulting on payment obligations is not protected by comprehensive domestic or international legal insolvency procedures and liquidation rules. One common crisis resolution tool for states is to restructure the debt, which implies making the debt burden manageable through a renegotiation of the outstanding debt agreements.

Intercreditor equity claims
When sovereign debtors are faced with payment difficulties and have limited resources available, they must also decide how the economic burden of the restructuring should be distributed among the different types of creditors – how much the state is able to pay each of them, and which creditor it will prioritise and pay first. During restructuring processes, creditors frequently claim that they are not being treated equally, or that they should receive preferential treatment. Such inter-creditor equity claims are often conflicting and present a fundamental challenge to the resolution of sovereign debt crises. 

The contribution of the PhD
As there is no comprehensive insolvency law in domestic or international law for sovereign states there is also no clear overarching rule distributing the economic burden of a restructuring between creditors. This thesis provides an in-depth analysis of the fragmented regulatory framework dealing with intercreditor equity. It explores the content and applicability of rules in both domestic and international law, public and private, that directly or indirectly provide for equal and differential treatment of creditors. This includes examination of contract provision providing for equal or preferential treatment, the prohibition against discrimination in the European Convention on Human Rights and in international investment agreements, and so-called vulture fund legislation in domestic law. 

The thesis argues that under the current legal framework where comprehensive insolvency laws for states are absent, the number of fragmented intercreditor equity rules will lessen a debtor state’s room for manoeuvre to the extent that it is difficult to reach a sustainable debt restructuring. It shows that the existing legal framework for dealing with sovereign debt crisis is deficient and needs to be improved through increased international cooperation. 
 

Published Sep. 3, 2020 3:07 PM - Last modified Sep. 21, 2020 10:59 AM