Bondholders Rights as a Function of Nationality Rather than Contract

Recent debt restructurings have raised the question whether some investors in sovereign debt might have additional rights (or obligations) as a result of bilateral investment treaties between their home states and the debtor state. It seems strange to think that investors from, say, Ruritania might have different rights than investors from Transylvania, even though they hold the exact same instrument, simply as a function of their nationality. Is this really the type of system that investors want? That sovereigns want? Livia Hinz of the European University Institute has done super interesting work on this topic, including on how treaty drafters are responding to the potential impact of investment arbitration on sovereign debt. She joins us to discuss whether investment arbitration really offers much of value to investors, its potential implications for sovereign debt restructurings, and how bilateral investment treaties are addressing these topics.

Producer: Leanna Doty