The map illustrates the commercial creditor lawsuits against countries receiving the Heavily Indebted Poor Countries (HIPC) Initiative and Multilateral Debt Relief Initiative (MDRI) Assistance (As of the end of 2007) Lawsuits by commercial creditors to collect on outstanding HIPC country debt can erode gains made through debt relief. International courts and U.S. federal courts have allowed commercial creditors to pursue legal action in order to recover funds owed to them, but these creditors are sometimes viewed as creating difficult circumstances for countries that have received debt relief from other creditors.1 As of the end of 2007, based on survey data provided by country governments, 47 litigating creditors had filed suits against 11 countries receiving HIPC Initiative and MDRI debt relief (see table 7). Over $1 billion has been awarded by courts and is due to commercial creditors. About one-third of this total, or over $440 million, has been awarded against the Republic of Congo, followed by over $350 million against Liberia, and $100 million against the Democratic Republic of the Congo. Treasury officials told us that while a court can award claims in favor of commercial creditors, actually enforcing the judgments and receiving payment is a separate, potentially more difficult exercise. The international community has taken numerous actions to address such cases: •The World Bank’s Debt Reduction Facility (DRF) allows governments to buy back—at a deep discount—country debts owed to external, commercial creditors. Through grants, the DRF supports heavily indebted IDA-only countries that undertake reforms to retain professional services necessary in preparing these commercial debt reduction operations and assists the countries in funding the cost of these operations. For example, court judgments against Nicaragua were settled through the DRF-supported buyback. All four litigating creditors participated in the buyback operation and accepted a significant cut in the value of their legal claims. The Nicaragua buyback extinguished about $1.3 billion in commercial debt. Another buyback operation has been concluded for Mozambique. Furthermore, according to Treasury officials, a DRF operation is currently being prepared for Liberia, and the United States intends to contribute $5 million to help fund the cost of this buyback. • Paris Club creditors have committed as a group not to sell claims on HIPC countries to creditors who do not intend to provide debt relief. In April 2008, AfDB approved a proposal to establish the African Legal Support Facility (ALSF), which would provide (1) technical legal advice to members of the facility in creditor litigation, and (2) technical legal assistance to members of the facility to strengthen their legal expertise and negotiating capacity in matters related to debt management and other issues.3 The U.S. government was the only participating state to vote against establishment of the ALSF, and Treasury officials have noted that countries that have been the target of recent litigation have had very able legal representation to date, calling into question the need for ALSF assistance. In addition, Treasury staff expressed a position that some of the proposed activities for the ALSF are not an appropriate use of AfDB funds and noted concerns over the substantial administrative costs associated with ALSF. Furthermore, Treasury staff have emphasized that the DRF—an option already in operation that is achieving results in reducing country debt burdens to commercial creditors—is a preferred alternative. Source: January 2009, United States Government Accountability Office, Developing Countries: The United States Has Not Fully Funded Its Share of Debt Relief, and the Impact of Debt Relief on Countries’ Poverty-Reducing Spending is Unknown
Created by AfricaActionIntern on Jun 23, 2009
Last updated: 03/12/10 at 06:58 AM
Tags: Africa Action: Take Action Now
Creditor: Camdex Creditor Type: Commercial (bought from Kuwait) Legal Domicile of Creditor: Cayman Is. Location of Lawsuit: UK Original Claim (U.S. Dollars- Million): 40 Judgment for Creditor (U.S. Dollar-Million): 100 Status: creditor won Creditor: Donegal Creditor Type: commercial (fund) Legal Domicile of Creditor: British Virgin Is. Location of Lawsuit: UK Original Claim (U.S. Dollars- Million): 15.4 Judgment for Creditor (U.S. Dollar-Million): - Status: Pending Creditor: Connecticut Bank Creditor Type: Commercial Legal Domicile of Creditor: US Location of Lawsuit: US Original Claim (U.S. Dollars- Million): 0.9 Judgment for Creditor (U.S. Dollar-Million): 0.9 Status: creditor won/paid Creditor: Fap Famos Creditor Type: Commercial (ex-parastatal) Legal Domicile of Creditor: FR Yugoslavia Location of Lawsuit: Zambia/UK Original Claim (U.S. Dollars- Million): 16.1 Judgment for Creditor (U.S. Dollar-Million): 26.0 Status: out of court settled payment returned
Creditor: Banco Arabe Esp. Creditor Type: Commercial Legal Domicile of Creditor: Spain Location of Lawsuit: Uganda Original Claim (U.S. Dollars- Million): 1 Judgment for Creditor (U.S. Dollar-Million): 2.7 Status: Creditor won/paid Creditor: Burundi Creditor Type: Bilateral Legal Domicile of Creditor: Burundi Location of Lawsuit: - Original Claim (U.S. Dollars- Million): 1.6 Judgment for Creditor (U.S. Dollar-Million): - Status: case was dropped Creditor: Transroad Lt.d Creditor Type: Commercial Legal Domicile of Creditor: UK Location of Lawsuit: UK then Uganda Original Claim (U.S. Dollars- Million): 5.5 Judgment for Creditor (U.S. Dollar-Million): 20.6 Status: creditor won/paid Creditor: Industry of Construction Creditor Type: Commercial (ex-parastatal) Legal Domicile of Creditor: FR Yugoslavia Location of Lawsuit: Uganda Original Claim (U.S. Dollars- Million): 7 Judgment for Creditor (U.S. Dollar-Million): 9 Status: creditor won/paid Creditor: Sours Fap Famos Creditor Type: Commercial (ex-parastatal) Legal Domicile of Creditor: FR Yugoslavia Location of Lawsuit: Uganda Original Claim (U.S. Dollars- Million): 1.3 Judgment for Creditor (U.S. Dollar-Million): 1.8 Status: creditor won/paid Creditor: Iraw Fund for Ext Dev Creditor Type: Bilateral Legal Domicile of Creditor: Iraq Location of Lawsuit: - Original Claim (U.S. Dollars- Million): 2.6 Judgment for Creditor (U.S. Dollar-Million): 6.4 Status: creditor won Creditor: Shelter Afrique Creditor Type: Multilateral Legal Domicile of Creditor: Kenya Location of Lawsuit: - Original Claim (U.S. Dollars- Million): 0.1 Judgment for Creditor (U.S. Dollar-Million): 0.9 Status: settlement 0.1 Creditor: Government of Libya Creditor Type: Bilateral Legal Domicile of Creditor: Libya Location of Lawsuit: - Original Claim (U.S. Dollars- Million): 17.9 Judgment for Creditor (U.S. Dollar-Million): - Status: threat dropped Creditor: PTA Bank Creditor Type: Multilateral Legal Domicile of Creditor: Kenya Location of Lawsuit: - Original Claim (U.S. Dollars- Million): 1.2 Judgment for Creditor (U.S. Dollar-Million): - Status: case dropped
Creditor: Yugoslav parastatal Creditor Type: Commercial (ex-parastatal) Legal Domicile of Creditor: FR Yugoslavia Location of Lawsuit: - Original Claim (U.S. Dollars- Million): 104.9 Judgment for Creditor (U.S. Dollar-Million): - Status: threat outstanding
Creditor: J& S Franklin Creditor Type: Commercial Legal Domicile of Creditor: UK Location of Lawsuit: UK Original Claim (U.S. Dollars- Million): 1.1 Judgment for Creditor (U.S. Dollar-Million): 2.4 (paid 2) Status: creditor won Creditor: UNMARCO Creditor Type: commercial Legal Domicile of Creditor: France Location of Lawsuit: UK Original Claim (U.S. Dollars- Million): 0.6 Judgment for Creditor (U.S. Dollar-Million): paid 0.1 Status: pending Creditor: Exec. Outcomes Creditor Type: Commercial Legal Domicile of Creditor: US Location of Lawsuit: UK Original Claim (U.S. Dollars- Million): 19.5 Judgment for Creditor (U.S. Dollar-Million): 28.5 (paid 1.1) Status: creditor won Creditor: Chatelet Invest Creditor Type: Commercial Legal Domicile of Creditor: S. Leone Location of Lawsuit: UK Original Claim (U.S. Dollars- Million): 0.4 Judgment for Creditor (U.S. Dollar-Million): - Status: pending Creditor: Industrie Biscotti Creditor Type: Commercial Legal Domicile of Creditor: Italy Location of Lawsuit: UK Original Claim (U.S. Dollars- Million): 5.3 Judgment for Creditor (U.S. Dollar-Million): - Status: Pending Creditor: Scancern Int. Creditor Type: Commercial Legal Domicile of Creditor: Norway Location of Lawsuit: UK Original Claim (U.S. Dollars- Million): 3.7 Judgment for Creditor (U.S. Dollar-Million): 3.7 Status: settlement 2
Creditor: Annadale Assoc Creditor Type: Commercial (ex-parastatal) Legal Domicile of Creditor: UK (ex-fry) Location of Lawsuit: France Original Claim (U.S. Dollars- Million): 3 Judgment for Creditor (U.S. Dollar-Million): 8.9 Status: case dropped-sued Angola instead
Creditor: ExIm Bank Taiwan Creditor Type: Government Legal Domicile of Creditor: Taiwan Location of Lawsuit: US Original Claim (U.S. Dollars- Million): 60 Judgment for Creditor (U.S. Dollar-Million): 72.3 Status: creditor won Creditor: Banque Belgolaise Creditor Type: Commercial Legal Domicile of Creditor: Belgium Location of Lawsuit: Belgium Original Claim (U.S. Dollars- Million): 4.2 Judgment for Creditor (U.S. Dollar-Million): - Status: case pending
Creditor: Yugoimport Creditor Type: Commercial (ex-parastatal) Legal Domicile of Creditor: FR Yugoslavia Location of Lawsuit:- Original Claim (U.S. Dollars- Million): 10.9 Judgment for Creditor (U.S. Dollar-Million): - Status: Pending
Creditor: AGIP Creditor Type: Commercial Legal Domicile of Creditor: France Location of Lawsuit: France Original Claim (U.S. Dollars- Million): 55 Judgment for Creditor (U.S. Dollar-Million): Creditor won Status: creditor won
Creditor: Kintex Creditor Type: Commercial (fund) Legal Domicile of Creditor: Bulgaria Location of Lawsuit: - Original Claim (U.S. Dollars- Million): 8.7 Judgment for Creditor (U.S. Dollar-Million): 8.7 Status: Out of court settlement Creditor: Yugoimport Creditor Type: Commercial (ex-parastatal) Legal Domicile of Creditor: FR Yugoslavia Location of Lawsuit: - Original Claim (U.S. Dollars- Million): 122.7 Judgment for Creditor (U.S. Dollar-Million): 172.7 Status: Arbitration
Creditor: Energoinvest Creditor Type: Commercial (ex-parastatal) Legal Domicile of Creditor: FR Yugoslavia Location of Lawsuit: France then US Original Claim (U.S. Dollars- Million): 55.8 Judgment for Creditor (U.S. Dollar-Million): 81.7 Status: Creditor won Creditor: KHD Humboldt Creditor Type: Commercial Legal Domicile of Creditor: Germany Location of Lawsuit: n/a Original Claim (U.S. Dollars- Million): 23.5 Judgment for Creditor (U.S. Dollar-Million): 80.4 Status: Creditor won Creditor: Red Mountain Creditor Type: Commercial Legal Domicile of Creditor: US Location of Lawsuit: UK and US Original Claim (U.S. Dollars- Million): 27 Judgment for Creditor (U.S. Dollar-Million): 8.2 Status: Settlement Creditor: GAT Creditor Type: Commercial Legal Domicile of Creditor: Lebanon Location of Lawsuit: France Original Claim (U.S. Dollars- Million): 19 Judgment for Creditor (U.S. Dollar-Million): - Status: Arbitration Creditor: First Internat Bank Creditor Type: Commercial Legal Domicile of Creditor: Israel Location of Lawsuit: - Original Claim (U.S. Dollars- Million): - Judgment for Creditor (U.S. Dollar-Million):- Status: Threat outstanding
Creditor: Elliot Associates Creditor Type: Commercial Legal Domicile of Creditor: US Location of Lawsuit: - Original Claim (U.S. Dollars- Million): 8 Judgment for Creditor (U.S. Dollar-Million): 10 Status: Settlement
Creditor: ITOH Middle East Creditor Type: Commercial Legal Domicile of Creditor: Bahrain Location of Lawsuit: France Original Claim (U.S. Dollars- Million): 9.8 Judgment for Creditor (U.S. Dollar-Million): 7.2 Status: Settlement Creditor: GAT Creditor Type: Commercial Legal Domicile of Creditor: Lebanon Location of Lawsuit: France Original Claim (U.S. Dollars- Million): 77 Judgment for Creditor (U.S. Dollar-Million): 78.3 Status: Creditor won Creditor: FG Hemisphere Assoc LLC Creditor Type: Commercial (fund) Legal Domicile of Creditor: US Location of Lawsuit: US Original Claim (U.S. Dollars- Million): 35.9 Judgment for Creditor (U.S. Dollar-Million): 151.9 Status: Creditor won Creditor: AF CAP Inc Creditor Type: Commercial (fund) Legal Domicile of Creditor: Bermuda Location of Lawsuit: US Original Claim (U.S. Dollars- Million): 5.9 Judgment for Creditor (U.S. Dollar-Million): 19.2 Status: Creditor won Creditor: Berrebi Creditor Type: Commercial Legal Domicile of Creditor: France Location of Lawsuit: France Original Claim (U.S. Dollars- Million): 1.9 Judgment for Creditor (U.S. Dollar-Million): 7.75 Status: Creditor won Creditor: Kensington International Creditor Type: Commercial (fund) Legal Domicile of Creditor: Cayman Is Location of Lawsuit: France Original Claim (U.S. Dollars- Million): 30.6 Judgment for Creditor (U.S. Dollar-Million): 118.6 Status: Creditor won Creditor: Walker International Holdings Creditor Type: Commercial (fund) Legal Domicile of Creditor: British Virgin Is Location of Lawsuit: France Original Claim (U.S. Dollars- Million): 12.9 Judgment for Creditor (U.S. Dollar-Million): 38.7 Status: Creditor won Creditor: CommissImpex Creditor Type: Commercial Legal Domicile of Creditor: Congo Location of Lawsuit: Congo Original Claim (U.S. Dollars- Million): 19.7 Judgment for Creditor (U.S. Dollar-Million): 96.6 Status: Arbitration
Creditor: Winslow Bank (orin. Midland Italy) Creditor Type: Commercial Legal Domicile of Creditor: Bahamas Location of Lawsuit: US/UK/France Original Claim (U.S. Dollars- Million): 9.9 Judgment for Creditor (U.S. Dollar-Million): 4.6 Status: Creditor won Creditor: Del Favero Spa (orig. Midland Italy) Creditor Type: Commercial Legal Domicile of Creditor: Italy Location of Lawsuit: UK Original Claim (U.S. Dollars- Million): 2.8 Judgment for Creditor (U.S. Dollar-Million): 4.6 Status: Creditor won Creditor: Sconset Ltd Creditor Type: Commercial (fund) Legal Domicile of Creditor: British Virgin Islands Location of Lawsuit: Switzerland Original Claim (U.S. Dollars- Million): 18.2 Judgment for Creditor (U.S. Dollar-Million): Status: Arbitration pending Creditor: Gracechurch Capitol Creditor Type: Commercial (fund) Legal Domicile of Creditor: Cayman Islands Location of Lawsuit: France Original Claim (U.S. Dollars- Million): 8.9 Judgment for Creditor (U.S. Dollar-Million): Status: Case Pending Creditor: Antwerp Investments Creditor Type: Commercial (fund) Legal Domicile of Creditor: British Virgin Islands Location of Lawsuit: Switzerland Original Claim (U.S. Dollars- Million): 13.4 Judgment for Creditor (U.S. Dollar-Million): Status: Arbitration
Creditor: Cote D’Ivoire Creditor Type: Bilateral Legal Domicile of Creditor: Cote D’Ivoire Location of Lawsuit: Original Claim (U.S. Dollars- Million): 10.5 Judgment for Creditor (U.S. Dollar-Million): 0 Status: Threat Revoked
Creditor: Annadale Associates (co-guaranteed STP) Creditor Type: Commercial (ex-Yug parastatal) Legal Domicile of Creditor: UK Location of Lawsuit: France Original Claim (U.S. Dollars- Million): 3 Judgment for Creditor (U.S. Dollar-Million): 8.9 Status: In arbitration
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