Outcome of UN Ad Hoc Committee on Debt restructuring seen as first step

The final meeting of the committee adopted the new UN Principles on Sovereign Debt Restructuring Processes. This a set of nine principles to guide future debt restructuring processes, and future UN regime-building work in this area. This set builds on the five principles of the UNCTAD Roadmap that was released earlier this year, the remaining five (sovereign’s right to restructure; equitable Treatment, sovereign immunity; majority restructurings) are largely inspired by the vulture funds lawsuits at US courts against Argentina.

While these adopted principles are not the “multilateral legal framework for sovereign debt restructurings” that this Committee was intended to create, they are the first set of debt restructuring principles that the UN has created, and have the potential for precedent setting as the process moves forward.Next steps for the process will be decided at the 15 September meeting of the UN General Assembly where hopefully the principles will be adopted by the whole General Assembly and mandate for a follow-up process will be decided.

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