{"id":55836,"date":"2015-01-15T09:03:53","date_gmt":"2015-01-15T08:03:53","guid":{"rendered":"https:\/\/www.nzp.de\/?p=55836"},"modified":"2026-08-14T09:07:13","modified_gmt":"2026-08-14T07:07:13","slug":"rights-to-refuse-performance-in-the-case-of-government-bonds","status":"publish","type":"post","link":"https:\/\/www.nzp.de\/es\/rights-to-refuse-performance-in-the-case-of-government-bonds\/","title":{"rendered":"Rights to Refuse Performance in the Case of Government Bonds"},"content":{"rendered":"
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Neither a payment moratorium declared by a state nor debt restructuring agreements concluded with other bondholders give rise to a right to refuse performance under international law.<\/div>\n
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The defendant state, Argentina, issued an 8% Deutsche Mark bond 1997\/2009 in 1997 with a total nominal amount of DM 1 billion. The bond terms provided for the application of German law and Frankfurt am Main as the place of jurisdiction. Argentina now refuses to repay the nominal amount of the government bond and to pay interest. The claimant investor had acquired the government bonds before Argentina declared a public emergency due to a financial crisis and suspended foreign debt service by decree on the restructuring of liabilities and debt payments in order to reorganise it. The country subsequently also concluded restructuring agreements with other creditors.<\/div>\n
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A right to refuse performance under international law vis-\u00e0-vis so-called holdout creditors who refuse debt restructuring does not arise either from the declared payment moratorium or from the restructuring agreements concluded with other creditors. There is no general rule of international law within the meaning of Article 25 of the German Basic Law that entitles a state, as against a private individual, to refuse fulfilment of due private-law payment claims by relying on conduct regarded as legally objectionable, in order thereby to force that individual to participate in a restructuring of the issued government bonds agreed with the majority of creditors. International law does not recognise a uniform insolvency law for states from which a general rule on the winding-up or restructuring of debts could be derived. Nor do the Collective Action Clauses now regularly found in bond terms lead to any different conclusion; rather, they must be expressly agreed in order for majority decisions regarding the bond terms to be possible.<\/div>\n
Practical note: In new bond issues, care should be taken to ensure that the bond terms expressly provide for the applicability of Sections 5 et seq. of the German Act on Debt Securities (Schuldverschreibungsgesetz \u2013 SchVG). This enables creditors to approve a restructuring of the bond by majority resolution with effect for all holders.<\/div>\n<\/div>","protected":false},"excerpt":{"rendered":"

Neither a payment moratorium declared by a state nor debt restructuring agreements concluded with other bondholders give rise to a right to refuse performance under international law. The defendant state, Argentina, issued an 8% Deutsche Mark bond 1997\/2009 in 1997 with a total nominal amount of DM 1 billion. The bond terms provided for the […]<\/p>\n","protected":false},"author":29,"featured_media":55838,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[15],"tags":[],"class_list":["post-55836","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news"],"acf":[],"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\n\t\n\t\n\t\n\t\n\t\n\t\t