International Investment Law and the Global Financial Architecture
Show Less

International Investment Law and the Global Financial Architecture

Edited by Christian J. Tams, Stephan W. Schill and Rainer Hofmann

This book explores whether investment law should protect against such regulatory measures, including where these have the support of multilateral institutions. It considers where the line should be drawn between legitimate regulation and undue interference with investor rights and, equally importantly, who draws it.
Buy Book in Print
Show Summary Details
You do not have access to this content

Chapter 6: Sovereign bond disputes before investment treaty tribunals: Safeguarding the exercise of collective action clauses with a single-limb voting mechanism

Yanying Li

Abstract

In October 2014, the Executive Board of the International Monetary Fund approved the staff paper on ‘Strengthening the Contractual Framework to Address Collective Action Problems in Sovereign Debt Restructuring’. Among other things, that paper is in favour of a single Collective Action Clause (CAC) with a menu of voting procedures, including (1) a series-by-series voting procedure, (2) a two-limb aggregated voting procedure, and (3) a single-limb voting procedure with the possibility for ‘sub-aggregation’. The single-limb voting procedure in option (3) will enable contract terms to be amended on the basis of a single vote across all affected instruments, thereby disallowing a creditor or a group of creditors from obtaining a blocking position in a particular series. In the view of the author, the single-limb voting procedure resembles the cram-down procedure in US municipality bankruptcy law, with one missing element. Whereas the cram-down procedure contains a safeguard provision that ensures minimum protection for each impaired dissent creditor class through the prohibition of unfair discrimination and fair and equitable treatment principle, the single-limb voting procedure is silent about creditor protection in this context. In searching for a safeguard provision for the single-limb voting procedure, the author discovers the similarities between the safeguard provision for cram-down procedures and the fair and equitable treatment principle under investment treaties, and argues that investment arbitration could serve as an appropriate forum to develop a safeguard provision for the single-limb voting procedure. Keywords: sovereign debt, collective action clause, investment arbitration, cram-down

You are not authenticated to view the full text of this chapter or article.

Elgaronline requires a subscription or purchase to access the full text of books or journals. Please login through your library system or with your personal username and password on the homepage.

Non-subscribers can freely search the site, view abstracts/ extracts and download selected front matter and introductory chapters for personal use.

Your library may not have purchased all subject areas. If you are authenticated and think you should have access to this title, please contact your librarian.


Further information

or login to access all content.