A Sovereign Debt Arbitral Mechanism from a Human Rights Perspective

From time to time, States experience difficulty in servicing their debts. This necessitates changes to the repayment terms of repayment on at least some of their debt—either that the terms are made flexible or the debt or part of it be cancelled. Importantly, there is a recognised need for debt repayment problems and debt-related disputes to be resolved through an independent and impartial process. This chapter discusses efforts to create an international sovereign debt restructuring mechanism which is not only independent of both lenders and borrowers but also seeks to ensure that States that are struggling with debt repayment can achieve economic viability and growth and restore their capacity to service their external debts without compromising the fulfilment of their international human rights obligations. Particular attention will be paid to the UN Basic Principles on Sovereign Debt Restructuring and their implications for the future of sovereign debt restructuring.