Abstract

Financial crises often compel indebted countries to restructure their external public debt in order to ease their economic burden. Since this is usually quite disadvantageous to the creditors, they consequently sometimes begin "holdout" litigation so as to obtain the face value of their original bonds with interest. In this context, investor-state arbitration has been seen as an attractive alternative to litigation for creditors because the recognition and enforcement of arbitral awards is far more effective than those of foreign judgments. Yet such a holdout strategy would undermine an ...