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regulate the recovery of the defaulted sovereign debt of developing countries; |
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and for connected purposes. |
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Be it enacted by the Queen’s most Excellent Majesty, by and with the advice and |
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consent of the Lords Spiritual and Temporal, and Commons, in this present |
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Parliament assembled, and by the authority of the same, as follows:— |
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“consent application” means an application under section 4, including all |
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attachments to the application; |
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“debtor country” means the Low or Middle Income country which is the |
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debtor of the defaulted sovereign debt for which a creditor is seeking |
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“defaulted sovereign debt” means a sovereign debt following the |
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occurrence of any circumstance entitling a creditor of the sovereign |
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debt to exercise the creditor‘s right to institute proceedings to recover |
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payment of part or all of the sovereign debt; |
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“diplomatic agent” has the same meaning as in the Diplomatic Privileges |
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“Low or Middle Income country” means any country whose income |
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group is classified as low income, lower middle income or higher |
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middle income by the International Bank for Reconstruction and |
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Development and the International Development Association; |
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“recovery proceedings” means an application to a court under section 4; |
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“sovereign debt” means any debt of principal, interest or otherwise, owed |
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by a government, or government agency, of a foreign state; |
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“British citizen” means a British citizen under the British Nationality Act |
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2 | Limitation on right of recovery in a court |
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A court may not award a creditor of the defaulted sovereign debt of a Low or |
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Middle Income country the right to recover in excess of the maximum recovery |
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amount as defined in section 3 of this Act. |
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3 | Maximum recovery amount |
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In this Act the maximum recovery amount is the amount that equals— |
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(a) | the amount paid by a creditor to acquire the interest the creditor has in |
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the defaulted sovereign debt (excluding any legal fees or other fees and |
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costs associated with collection); and |
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(b) | interest, calculated as simple interest only, on the amount the creditor |
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paid to acquire the interest in the defaulted sovereign debt, from the |
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date the creditor acquired rights over the defaulted sovereign debt, and |
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at an interest rate which is the lower of— |
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(i) | the interest rate in the loan agreement for the sovereign debt; or |
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(ii) | the interest rate set in accordance with section 17 of the |
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Judgments Act 1838 (c. 110); |
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provided that the maximum recovery amount calculated under (a) and (b) |
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above shall be reduced by a sum equal to any amounts recovered from other |
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actions related to the same defaulted sovereign debt. |
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4 | Court consent required before recovering defaulted sovereign debt |
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A creditor must make an application to, and receive the consent of, a court |
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before commencing proceedings in the United Kingdom for payment of any |
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amount of defaulted sovereign debt. |
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5 | Provision of consent application |
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(1) | For each consent application, a copy of the consent application and this Act |
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must be sent by the creditor to the diplomatic agent in the United Kingdom of |
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the debtor country, or his representative. |
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(2) | For each consent application, a copy of the consent application must be sent by |
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the creditor to the Secretary of State. |
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6 | Disclosure required in consent application |
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A consent application must include— |
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(a) | all original loan agreements and all collateral and amending loan |
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(b) | all assignment documentation providing evidence of the chain of title |
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from the original creditor of the defaulted sovereign debt to the creditor |
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seeking to institute the recovery proceedings which are the subject of |
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(c) | any other documentation necessary to establish the creditor’s right to |
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institute recovery proceedings; |
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(d) | a statement of the names and addresses of all persons who will receive |
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a financial benefit of more than 1% of the total amounts recovered from |
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the proposed recovery proceedings; |
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(e) | where the creditor is a company, a copy of the company’s incorporation |
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documents, the names and addresses of all company directors and |
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board members, and the company’s accounts for the previous financial |
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(f) | a statement of the total amount paid for acquiring the right to the |
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financial benefit by all persons who will receive a financial benefit of |
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more than 1% of the total amounts recovered from the proposed |
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recovery proceedings, the dates the rights were acquired and the |
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identity of any person from whom the rights were acquired; |
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(g) | a declaration that the financial benefit of all persons listed in |
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accordance with paragraph (d) has not been further assigned or |
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(i) | what the creditor calculates the maximum recovery amount to |
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(ii) | the amount the creditor claims if the consent application is |
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(i) | a declaration that neither the creditor, nor any owner, employee or |
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agent of the creditor has given anything of value to the debtor country, |
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or any officer or agent of the debtor country, in exchange for any action |
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in connection with the acquisition or collection of the defaulted |
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sovereign debt, or any information concerning the acquisition or |
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collection of the defaulted sovereign debt. |
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7 | Right to discontinuance of recovery proceedings |
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On application by the diplomatic agent in the United Kingdom of the debtor |
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country or his representative, another creditor of the debtor country, or the |
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Secretary of State, a court may order that recovery proceedings be |
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discontinued on the grounds that the requirements of this Act have not been |
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8 | Restriction of enforcement of recovery in UK courts |
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If a creditor has received a judgement by a court in a jurisdiction other than the |
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United Kingdom granting the creditor the right to be paid part or all of a |
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defaulted sovereign debt by the debtor country, and the creditor is entitled to |
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enforce that judgement in the United Kingdom, the creditor is only entitled to |
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enforce the judgement in the United Kingdom up to the maximum recovery |
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9 | Debtor right of recovery of amounts in excess of maximum recovery amount |
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If, as a result of an order of a foreign court, or a dispute resolution procedure |
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that does not involve court proceedings, a creditor who is a British citizen, or a |
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business carrying on business within the United Kingdom, has received |
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payment from the debtor country in excess of the maximum recovery amount, |
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the debtor country or interested party may apply for, and a court may order, |
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the creditor to repay to the debtor country the amount that exceeds the |
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