The Contracting States
Considering that addressing the sovereign debt problems of States is an important part of international cooperation,
Aiming at increasing the efficiency, stability and predictability of the international financial system and achieving sustained, inclusive and equitable economic growth and sustainable development, in accordance with national circumstances and priorities,,
Aware of the importance of establishing a clear set of principles for the management and resolution of financial crises that take into account the obligation of States and of their creditors to act in good faith and with a cooperative spirit in order to reach an orderly and mutually acceptable rearrangement of the debt of sovereign States,
Emphasising the importance of the “Principles on Promoting Responsible Sovereign Lending and Borrowing” issued by the United Nations Conference on Trade and Development on 4 May 2011, which aim at reducing the prevalence of sovereign debt crises, at preventing unsustainable debt situations, at maintaining steady economic growth and at helping achive the Millennium Development Goals, encouraging to that end responsible sovereign borrowing,
Recalling the special importance of the principle of transparency,
Desiring to establish a fair mechanism for the settlement disputes between the State and its creditors and, if necessary, for the restructuration of sovereign debts in an efficient, predictable and orderly manner,
Have agreed as follows:
- There is hereby established the International Centre for the Financial Safeguard of States (hereinafter called the Centre).
- The purpose of the Centre shall be to provide conciliation and arbitration facilities in order to settle disputes arising between the parties to the [same] bond loan and, if necessary, to assure an orderly restructuring of the debt of a Contracting State that has issued that loan.
- The seat of the Centre shall be in [city]|[Paris].
- The seat may be moved to any other place by decision of the Council adopted by a majority of two-thirds of its members.
- The Centre shall have a Council and a Secretariat. It shall maintain a Panel of Conciliators and Arbitrators, and a Panel of Experts.
- The Centre assures the development of facilities necessary for achieving its objective and makes them available to Contracting States.
- The Centre informs the public about its mission and the legal and institutional framework of its activities. It renders public data and information concerning pending or closed conciliation and arbitration proceedings to the extent that they are not confidential.
The Council shall be composed of one representative of each Contracting State.
- Without prejudice to the powers and functions vested in it by other provisions of this Convention, the Council shall:
(a) adopt the administrative and financial regulations of the Centre;
(b) adopt the rules of procedure for the institution of conciliation and arbitration proceedings at the Centre (hereinafter called the Conciliation and Arbitration Rules of the International Centre for the Financial Safeguard of States);
(c) determine the conditions of service of the Secretary-General, of any Deputy Secretary-General and of the staff;
(d) adopt the annual budget of revenues and expenditures of the Centre;
(e) approve the annual report on the operation of the Centre.
The decisions referred to in sub-paragraphs (a), (b) and (d) above shall be adopted by a majority of two-thirds of the members of the Council.
- The Council may appoint such committees as it considers necessary.
- The Council shall also exercise such other powers and perform such other functions as it shall determine to be necessary for the implementation of the provisions of this Convention.
The Council establishes its Rules of Procedure.
The Council shall hold an annual meeting and such other meetings as may be determined by the Council, convened by the Chairman, or convened by the Secretary-General at the request of not less than five members of the Council.
The Council designates its Chairman.
- Except otherwise provided under the present Convention, the decisions of the Council shall be adopted by a majority of the votes cast.
- Each member of the Council shall have one vote.
- A quorum for any meeting of the Council shall be a majority of its members.
The Secretariat shall consist of a Secretary-General, one or more Deputy Secretaries-General and staff.
- The Secretary-General and any Deputy Secretary-General shall be elected by the Administrative Council by a majority of two-thirds of its members for a term of service not exceeding six years and shall be eligible for re-election. After consulting the members of the Council, the Chairman shall propose one or more candidates for each such office.
- The offices of Secretary-General and Deputy Secretary-General shall be incompatible with the exercise of any political function. Neither the Secretary-General nor any Deputy Secretary-General may hold any other employment or engage in any other occupation except with the approval of the Council.
- During the Secretary-General’s absence or inability to act, and during any vacancy of the office of Secretary-General, the Deputy Secretary-General shall act as Secretary-General. If there shall be more than one Deputy Secretary-General, the Council shall determine in advance the order in which they shall act as Secretary-General.
- The Secretary-General shall be the legal representative and the principal officer of the Centre and shall be responsible for its administration, including the appointment of staff, in accordance with the provisions of this Convention and the rules adopted by the Council.
- The Secretary-General shall ensure the dissemination to the public of the information and data concerning the mission and the activities of the Centre to the extent that they are not confidential.
- The Secretary-General shall prepare an annual report on the activities of the Centre. This report gathers in particular the data on the enforcement of the decisions and awards rendered under the Convention.
- For conciliation and arbitration proceedings, the Secretary-General shall:
(a) carry out the duties vested in him by the present Convention and the Conciliation and Arbitration Rules;
(b) develop the facilities necessary to the proper administration of proceedings before the Centre.
- The Secretary-General shall manage the archives of the Centre.
The Panel of Conciliators and Arbitrators and the Panel of Experts shall each consist of qualified persons, designated as provided in Articles 14 to 17, who are willing to serve thereon.
- Each Contracting State may designate to each Panel four persons who may but need not be its nationals.
- The Secretary-General of the Centre may designate ten persons to each Panel. The persons designated by the Secretary-General to a Panel shall each have a different nationality.
- Persons designated to serve on the Panel of Conciliators and Arbitrators and on the Panel of Experts shall be persons of high moral character and recognized competence in the fields of law or finance, who may be relied upon to exercise independent judgment.
- The Secretary-General, in designating persons to serve on the Panels, shall in addition pay due regard to the importance of ensuring representation on the Panels of the principal legal systems of the world.
- Panel members shall serve for renewable periods of six years.
- In case of death or resignation of a member of the Panel of Conciliators and Arbitrators or the Panel of Experts, the authority which designated the member shall have the right to designate another person to serve for the remainder of that member’s term.
- Members of the Panel of Conciliators and Arbitrators or of the Panel of Experts shall continue in office until their successors have been designated.
- A person may serve on both the Panel of Conciliators and Arbitrators and of the Panel of Experts.
- If a person shall have been designated to serve on the same Panel by more than one Contracting State, or by one or more Contracting States and the Secretary-General, he shall be deemed to have been designated by the authority which first designated him or, if one such authority is the State of which he is a national, by that State.
- All designations shall be notified to the Secretary-General and shall take effect from the date on which the notification is received.
- The Secretary-General designates a Panel of Creditors’ Representatives.
- Persons designated to serve on the Panel of Representatives shall be persons of high moral character and recognized competence in the fields of law and finance. They may not serve on either the Panel of Conciliators and Arbitrators or the Panel of Experts.
- When the Panel of Representatives is designated, the Secretary-General ensures a balance between the Contracting States and between the principal legal systems of the world.
- The expenditure of the Centre shall be met out of charges for the use of its facilities, or out of other receipts.
- If the expenditure of the Centre cannot be met out in accordance with paragraph 1, the excess shall be borne by the Contracting States in accordance with rules adopted by the Council.
The Centre shall have international legal personality. The legal capacity of the Centre shall include the capacity:
(a) to contract;
(b) to acquire and dispose of movable and immovable property;
(c) to institute legal proceedings.
To enable the Centre to fulfil its functions, it shall enjoy in the territories of each Contracting State the immunities and privileges set forth in this Section.
The Centre, its property and assets shall enjoy immunity from all legal process, except when the Centre waives this immunity.
The members of the Council, persons acting as conciliators, arbitrators or experts, and the officers and employees of the Secretariat:
(a) shall enjoy immunity from legal process with respect to acts performed by them in the exercise of their functions, except when the Centre waives this immunity;
(b) not being local nationals, shall enjoy the same immunities from immigration restrictions, alien registration requirements and national service obligations, the same facilities as regards exchange restrictions and the same treatment in respect of travelling facilities as are accorded by Contracting States to the representatives, officials and employees of comparable rank of other Contracting States.
The provisions of Article 23 shall apply to persons appearing in proceedings under this Convention as parties, agents, creditors’ representatives, counsels, advocates, witnesses or experts; provided, however, that sub-paragraph (b) thereof shall apply only in connection with their travel to and from, and their stay at, the place where the proceedings are held.
- The archives of the Centre shall be inviolable, wherever they may be.
- With regard to its official communications, the Centre shall be accorded by each Contracting State treatment not less favourable than that accorded to other international organisations.
- The Centre, its assets, property and income, and its operations and transactions authorized by this Convention shall be exempt from all taxation and customs duties. The Centre shall also be exempt from liability for the collection or payment of any taxes or customs duties.
- Except in the case of local nationals, no tax shall be levied on or in respect of expense allowances paid by the Centre to the members of the Council, or on or in respect of salaries, expense allowances or other emoluments paid by the Centre to officials or employees of the Secretariat.
- No tax shall be levied on or in respect of fees or expense allowances received by persons acting as conciliators, arbitrators, or experts in proceedings under this Convention, if the sole jurisdictional basis for such tax is the location of the Centre or the place where such proceedings are conducted or the place where such fees or allowances are paid.
The jurisdiction of the Centre shall extend to any legal dispute
– related to a bond loan issued by a Contracting State (or any constituent subdivision or agency of a Contracting State designated to the Centre by that State) which is at risk of default on the payments on this bond loan;
– between the issuer State (or any constituent subdivision or agency of a Contracting State designated to the Centre by that State) and one or more holders of a bond of such bond loan; and
– which the parties to the dispute consent in writing to submit to the Centre.
Consent of the parties to the jurisdiction of the Centre shall, unless otherwise subsequently agreed by the parties, be deemed to constitute a waiver of any other remedy for the settlement of any dispute within the jurisdiction of the Centre.
- No Contracting State shall exercise diplomatic protection, or bring an international claim, in respect of a dispute which one of its nationals and another Contracting State shall have consented to submit or shall have submitted to the jurisdiction of the Centre.
- Diplomatic protection, for the purposes of paragraph 1, shall not include informal diplomatic exchanges for the sole purpose of facilitating a settlement of the dispute.
- Disputes within the jurisdiction of the Centre within the meaning of Article 27 are subject to conciliation proceedings conducted by a Conciliator.
- In case of failure of the conciliation proceedings, the dispute is decided by an Arbitral Tribunal.
- The Conciliator, as well as the Arbitral Tribunal, may be assisted, if necessary, by Experts.
- The rules of procedures for both the conciliation proceedings and for the arbitration proceedings are set out in Articles 31 to 48 of the present Convention, as well as by the Conciliation and Arbitration Rules of the Centre.
- Any conciliation or arbitration proceedings are conducted in accordance with the provisions of the present Convention and with the Conciliation and Arbitration Rules in effect on the date on which the Centre is seized.
The Centre can be seized by request deposited with the Secretary-General:
(1) by a Contracting State, a constituent subdivision or agency of a Contracting State, that has issued a bond loan which presents a risk of default on the payments; or
(2) by one or more holders of bonds for which the issuer State is in default on a payment and whose debts represent at least 10% of the nominal value, unless the parties to the dispute have agreed otherwise.
- The Secretary-General designates the Conciliator from the Panel of Conciliators and Arbitrators.
- The Conciliator designated in accordance with the provisions of the present Article must not be a national of the issuer State.
The Conciliator may designate one or more Experts from the Panel of Experts in order to assist him.
Any holder of a bond from the bond loan concerned may request the registration of his debt with the Secretary-General.
- The creditors whose debts are registered may form one or more Committees of Creditors.
- Each Committee of Creditors designates a Representative.
- The Conciliator examines the reality and value of the registered debts.
- He renders a decision on the certification of debts that are subject to the proceedings before the Centre.
- The Conciliator controls the representativeness of the Committees of Creditors.
- He renders a decision on the certification of the Committees of Creditors taking part in the proceedings before the Centre.
The Conciliator renders a decision on the jurisdiction of the Centre and the admissibility of the request within a reasonable time.
The Conciliator examines the assertions and objections of the parties and makes proposals for a solution including, if appropriate, a restructuring plan.
The parties have the obligation to negotiate in good faith.
In the event the conciliation proceedings fail, the parties to the dispute designate an Arbitral Tribunal. Its task is to decide the dispute and, if necessary, to adopt a restructuring plan.
- The Arbitral Tribunal decides in accordance with such rules of law as may be agreed by the parties and in accordance with the applicable rules and principles of international law.
- In case a restructuring plan is established, the Arbitral Tribunal shall
(a) respect the principle of equality of creditors, to the extent that the latter do not waive it;
(b) take into account the essential human needs of the population of the debtor State and the individual rights and freedoms guaranteed by international law and the domestic law of the issuer State;
(c) take into account the level of development of the issuer State and its real capacity to pay; and
(d) reach a solution which is, under the specific circumstances of the case, both reasonable and feasible, both for the debtor State and for the bondholders.
After consultation of the parties, the Arbitral Tribunal may agree to hear third parties who may offer a perspective, particular knowledge or insight that is distinct from that of the disputing parties, in particular on the economic and financial situation of the State.
- The Arbitral Tribunal renders its award by majority of the votes of its members within a reasonable time.
- The award shall be rendered in writing.
- The award shall include, if necessary, a detailed restructuring plan for the debt of the issuer State.
- The award shall state the reasons upon which it is based.
- The award can be subject to a request for interpretation or rectification.
- At any stage of the proceedings and after hearing the parties, the Conciliator or the Arbitral Tribunal may, if they deem that the circumstances so require, order a temporary suspension of the payments on the bonds concerned by the proceedings or any other provisional measure in order to protect the right of any party.
- The information on such measures is immediately notified to the parties and their representatives, to counsels and to the Secretary-General.
- The Conciliator or the Arbitral Tribunal shall constantly review whether the maintaining of the suspension of payments or any other provisional measure is justified.
- Any request by a party to rectify a clerical, arithmetical or similar error shall be addressed to the Secretary-General.
- If possible, the request shall be submitted to the Conciliator or the Arbitral Tribunal that rendered the decision or the award.
- If any dispute shall arise between the parties as to the meaning or scope of a decision or of an award, either party may request interpretation of the award by an application in writing addressed to the Secretary-General.
- If possible, the request shall be submitted to the Conciliator or the Arbitral Tribunal that rendered the decision or the award.
- Either party may request annulment of a decision rendered by a Conciliator or an award rendered by an Arbitral Tribunal by an application in writing addressed to the Secretary-General on one or more of the following grounds:
(a) that the Conciliator was not properly designated or the Arbitral Tribunal was not properly constituted;
(b) that the Conciliator or the Arbitral Tribunal has manifestly exceeded its powers;
(c) that there was corruption on the part of the Conciliator or of a member of the Arbitral Tribunal;
(d) that there has been a serious departure from a fundamental rule of procedure;
(e) that the decision or the award has failed to state the reasons on which it is based.
- The application shall be made within 120 days after the date on which the decision or the award was rendered except that when annulment is requested on the ground of corruption such application shall be made within 120 days after discovery of the corruption and in any event within three years after the date on which the decision or the award was rendered.
- On receipt of the request the Secretary-General shall forthwith appoint an ad hoc Committee of three persons from the Panel of Conciliators and Arbitrators. None of the members of the Committee shall have been a member of the Tribunal which rendered the award, or shall have acted as a Conciliator in the same dispute. The Committee shall have the authority to annul the award or any part thereof on any of the grounds set forth in paragraph 1 of the present Article.
- The Committee may, if it considers that the circumstances so require, stay enforcement of the award pending its decision. If the applicant requests a stay of enforcement of the award in his application, enforcement shall be stayed provisionally until the Committee rules on such request.
- If the decision or the award is annulled, the dispute shall, at the request of either party, be submitted to a new Arbitral Tribunal.
The decisions and awards rendered by the Conciliator and the Arbitral Tribunal shall be binding on the parties and shall not be subject to any appeal or to any other remedy except those provided for in this Convention.
The parties take all the necessary measures to give effect to the decision or award and, where adopted, the restructuring plan.
Each Contracting State shall recognize a decision or an award rendered pursuant to this Convention as binding and enforce it within its territories as if it were a final judgment of a court in that State.
- A party seeking recognition or enforcement in the territories of a Contracting State shall furnish to a competent court or other authority which such State shall have designated for this purpose a copy of the award certified by the Secretary-General. Each Contracting State shall notify the Secretary-General of the designation of the competent court or other authority for this purpose and of any subsequent change in such designation.
- Execution of the award shall be governed by the laws concerning the execution of judgments in force in the State in whose territories such execution is sought.
- The issuer State waives its right to claim for itself and for its property any immunity from jurisdiction and from execution which would impede the enforcement on the territory of another Contracting State of a decision or award rendered by a Conciliator or an Arbitral Tribunal in accordance with this Convention.
- Unless a statement to the contrary specifically addressing one of the categories of property, the waiver of immunity from execution by a State referred to in paragraph 1 of the present Article does not apply to the following categories of property:
(a) property, including any bank accounts, used or intended for use in the performance of the functions of the diplomatic mission of the State or its consular posts, special missions, missions to international organisations or delegations to organs of international organisations or to international conferences;
(b) property of a military character or used or intended for use in the performance of military functions;
(c) property of the central bank or any other monetary authority of the State;
(d) property forming part of the cultural heritage of the State or part of its archives and not placed or intended to be placed on sale;
(e) property forming part of an exhibition of objects of scientific, cultural or historical interest and not placed or intended to be placed on sale.
- Every three month, the issuer State shall notify the Secretary-General of the payments made in accordance with the decision of the Conciliator or the award of the Arbitral Tribunal.
- If an issuer State experiences difficulties in the execution of the decision of the Conciliator or the award of the Arbitral Tribunal, it shall inform the Secretary-General.
- If a bondholder does not obtain the full execution of the decision of the Conciliator or the award of the Arbitral Tribunal from the issuer State, he may inform the Secretary-General.
- The Secretary-General shall summarise the information received and transmit it to the Council.
- Such information shall be reproduced in the annual report of the Centre.
- In case the issuer State fails to comply with its obligations pursuant to the decision of the Conciliator or the award of the Arbitral Tribunal, in particular, where adopted, those of the restructuring plan, the Council shall take any measure, in conformity with international law, that it considers necessary and appropriate for the execution of the decision or of the award.
- The Council shall consider and approve procedures and institutional mechanisms to identify the non-compliance of issuer States on their obligations pursuant to the decisions of Conciliators or the awards of Arbitral Tribunals, as well as measures to be adopted in respect of issuer States.
The charges payable by the parties for the use of the facilities of the Centre shall be determined by the Secretary-General in accordance with the regulations adopted by the Council.
- Each Conciliator and each Arbitral Tribunal shall determine the fees and expenses of its members within limits established from time to time by the Council and after consultation with the Secretary-General.
- Nothing in paragraph 1 of this Article shall preclude the parties from agreeing in advance with the Conciliator or Arbitral Tribunal concerned upon the fees and expenses of its members.
- In the conciliation report, the Conciliator shall, except if the parties otherwise agree, assess the expenses incurred by the parties in connection with the proceedings, and shall decide how and by whom those expenses, fees and expenditures, and the charges for the use of the facilities of the Centre shall be paid. Each party shall bear any other expenses it incurs in connection with the proceedings.
- In the case of arbitration proceedings the Arbitral Tribunal shall, except as the parties otherwise agree, assess the expenses incurred by the parties in connection with the proceedings, and shall decide how and by whom those expenses, the fees and expenditures of the members of the Arbitral Tribunal and the charges for the use of the facilities of the Centre shall be paid. Such decision shall form part of the award.
Subject to Article 76, conciliation and arbitration proceedings shall be held at the seat of the Centre.
Conciliation and arbitration proceedings may be held, if the parties so agree,
(a) at the seat of the Permanent Court of Arbitration or of any other appropriate institution, whether private or public, with which the Centre may make arrangements for that purpose; or
(b) at any other place approved by the Conciliator or Arbitral Tribunal after consultation with the Secretary-General.
- The languages of the proceedings are [French, English or Spanish].
- When they differ from the language in which the bond loans object of the proceedings are drafted, the Conciliator and the Arbitral Tribunal may, after consultation with the parties, decide to choose such language for the communication of any written statement and, if necessary, for the hearing.
- If it deems it appropriate, the Conciliator or the Arbitral Tribunal may order the translation of any document produced by a party in a language other than those of paragraphs 1 and 2, at the cost of the party concerned.
Any dispute arising between Contracting States concerning the interpretation or application of this Convention which is not settled by negotiation shall be referred to the International Court of Justice by the application of any party to such dispute, unless the States concerned agree to another method of settlement.
Any Contracting State may propose amendment of this Convention. The text of a proposed amendment shall be communicated to the Secretary-General not less than 90 days prior to the meeting of the Council at which such amendment is to be considered and shall forthwith be transmitted by him to all the members of the Council.
- If the Council shall so decide by a majority of two-thirds of its members, the proposed amendment shall be circulated to all Contracting States for ratification, acceptance or approval. Each amendment shall enter into force 30 days after dispatch by the depositary of this Convention of a notification to Contracting States that all Contracting States have ratified, accepted or approved the amendment.
- No amendment shall affect the rights and obligations under this Convention of any Contracting State or of any of its constituent subdivisions or agencies, or of any national of such State arising out of consent to the jurisdiction of the Centre given before the date of entry into force of the amendment.
- This Convention shall be open for signature on behalf of States members of the United Nations or members of a specialised agency or of the International Atomic Energy Agency, as well as of any other State which is a party to the Statute of the International Court of Justice and of any other State invited by the General Assembly of the United Nations to become party to the Convention.
- This Convention shall be subject to ratification. Instruments of ratification shall be deposited with the Secretary-General of the United Nations.
- This Convention shall be open to accession by any State belonging to one of the categories referred to in paragraph 1. Instruments of accession shall be deposited with the Secretary-General of the United Nations.
- This Convention shall enter into force 30 days after the date of deposit of the [twentieth] [fortieth] instrument of ratification, acceptance or approval.
- For any State ratifying or acceding to this Convention after the deposit of the [twentieth] [fortieth] instrument of ratification or accession, it shall enter into force on the thirtieth day after the date of the deposit of its own instrument of ratification or accession.
Each Contracting State shall take such legislative or other measures as may be necessary for making the provisions of this Convention effective in its territories.
- Any Contracting State may denounce this Convention by written notice to the depositary of this Convention. The denunciation shall take effect six months after receipt of such notice by the depositary, who shall forthwith notify of it the Contracting States [and the Secretary-General of the Centre].
- Notice by a Contracting State pursuant to paragraph 1 shall not affect the rights or obligations under this Convention of that State or of any of its constituent subdivisions or agencies arising out of consent to the jurisdiction of the Centre given by one of them before such notice was received by the depositary.
Instruments of ratification, acceptance or approval of this Convention and of amendments thereto shall be deposited with the Secretary-General of the United Nations, which shall act as the depositary of this Convention. The depositary shall transmit certified copies of this Convention to States enjoying the right to become party to this Convention.
The depositary shall register this Convention with the Secretariat of the United Nations in accordance with Article 102 of the Charter of the United Nations and the Regulations thereunder adopted by the General Assembly.
The original of this Convention, whose [French, English and Spanish] texts are authentic, shall be deposited with the Secretary-General of the United Nations.
In witness whereof, the undersigned Plenipotentiaries, being duly authorized thereto by their respective Governments, have signed this Convention.