For over two years, Commonwealth countries have received advice on loan agreements and litigation
4 Feb 2009
Indebted poor countries should not sign outdated and legally unsound loan agreements that put them at risk of litigation according to the Commonwealth Secretariat’s Resident Legal Adviser
Devi Sookun from the Legal Debt Clinic, which advises and trains government officials to understand the implications of loan agreements, said that she does not want countries to repeat past mistakes.
“The situation we are in today arises out of loan agreements signed in the 1980s. Countries are still signing old versions of loan agreements which are not legally sound and safe.”
For instance, agreeing on a loan agreement containing the governing law jurisdiction to be a foreign jurisdiction in which the indebted country is not well versed is detrimental to a HIPC country. This implies that the country would need to hire law firms which are expensive. “They can’t get justice because they can’t afford to pay for it,” she explained.
What is HIPC?
HIPC stands for Heavily Indebted Poor Countries. It refers to countries with high amounts of debt and poverty. They are eligible for assistance from the International Monetary Fund and the World Bank. According to the World Bank, there are currently 41 HIPC countries. Of these, ten are from the Commonwealth. These are
Read More
Source:Commonwealth
