The growing prevalence and magnitude of climate-related natural disasters are perpetuating a climate debt trap in which recovery costs compound over time, progressively eroding the capacity of governments to obtain financing to respond to them. How can countries participating in global financial markets respond? This article focuses on natural disaster clauses in sovereign debt contracts, which enable a national government to temporarily suspend payments to its creditors when a natural disaster strikes the country. Natural disaster clauses are analyzed and critiqued as an example of contract innovation amidst ongoing debates about legal reform of the global financial system in response to climate change.

Smartphones have proven an exceptionally transformational technology. More than most innovations, smartphones have altered the human experience. Smartphones created the conditions for trillion-dollar digital marketplaces, like the AppStore and GooglePlay, which fostered the rise of digital platforms. Transacting with consumers by the billions, the largest platforms mediate unprecedented swaths of human activity. They now facilitate everything from yard sales to bank runs. Bringing computing closer to the human body set the stage for intimate surveillance and the attention economy. The sum total of these consequences runs far and wide—upending social and cultural norms, disrupting political systems, and even rewiring mental health and human neurology.Smartphones also fundamentally altered the consumer contracting environment. This chapter examines that transformation, highlighting emerging issues in the smartphone era of consumer contracting. Among those issues are unprecedented scale, data sensitivities, linguistic difficulties, and fundamental asymmetries. Consumer contracting trends initiated during the Industrial Revolution have been amplified with fast-paced technological transformations. Smartphones and their attendant consequences have deepened and accelerated old conundrums in consumer contracting—while also opening new ones. The net result: a further decoupling of consumer reality and contract law.

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One of the fastest growing areas of international law in recent times is also one of the most controversial. Between 1990 and 2010, the number of investment treaties surged from less than 500 to over 3,000. Through this expansion, foreign investors gained extensive rights to sue sovereign states directly in arbitration through investment treaty arbitration (ITA). The result: a remarkable transfer of sovereign power to a semi-private supranational adjudication system. Once investors challenged governments through the ITA system, bringing hundreds of claims, backlash ensued. Cases in which foreign investors challenged public interests—for instance, health regulations and emergency financial management—amplified outrage. Adjudicating disputes between foreign investors and sovereigns involves the assertion of private rights in matters of public interest. ITA involves the intrusion of international law into domestic spheres—in a sense, “peak” globalization. Yet, despite direct and compelling consequences for public interests, transparency in ITA is persistently low. Our study uses predictive modeling to shed light on ITA activity. We calculate the dimensions of overall ITA activity, combining known amounts with an estimate of unknown claims and awards. In doing so, we illustrate the “transparency gap” in ITA, which we estimate as an unreported $186 billion in claims and $15 billion in awards.

At the dawn of the Great Recession, the bankruptcy of Lehman Brothers shook the economy to its core. With other Wall Street institutions on the brink of insolvency, the financial system slid towards a free fall. Governments around the world responded with more than $11 trillion in emergency bailouts. Financial institutions deemed too-big-to-fail were rescued in the hopes of escaping an economic abyss. In the aftermath of the collapse, Congress acted to address dangerous risks and externalities in the financial sector. With the enactment of the Dodd-Frank Act, Congress codified the logic of “systemic importance” in financial regulation. In essence, if an institution is consequential enough to pose systemic risks to the entire economy, that institution should receive heightened regulatory scrutiny.A distinct but parallel set of questions now exists about certain digital platforms. A small number of companies—some governed by dual-class share structures—have immense power over social behavior, human health, and the information ecosystem. Yet, despite the enormous externalities generated by their business models, digital platforms remain virtually unregulated. Our paper addresses two primary questions: First, have some digital platforms attained systemically important status? And, if so, does their systemic importance warrant enhanced regulatory oversight? In addressing those questions, we consider parallels with financial regulation, drawing lessons from the framework for systemically important financial institutions (SIFIs) in the Dodd-Frank era.

The unique characteristics of sovereign debt finance provide fertile ground for opportunistic behavior and intractable disputes among states and their creditors. Lacking reliable contractual enforcement mechanisms and formal bankruptcy procedures, the sovereign debt restructuring process is hampered by fragmentation, costly standoffs, and unpredictable outcomes. The result is a non-system of ad hoc, decentralized negotiations and litigation that some fear is perpetually at risk of falling apart. To address these concerns, recent years have seen renewed efforts to fix sovereign debt through soft law, public-private collaboration, and informal governance mechanisms, which this Article collectively refers to as sovereign debt governance. This Article focuses on one of the most prominent proposed reforms in sovereign debt governance: the use of creditor committees to facilitate engagement between a sovereign debtor and its private external creditors. Notwithstanding the uniqueness of sovereign debt in international law and financial regulation, we explain how the debtor-creditor relationship reflects a fundamental governance challenge amidst individual distrust and collective disorder. This challenge suggests that the sovereign debt restructuring process can be improved by reforming the procedural rules and institutional frameworks that govern debtor-creditor engagement. To assess this proposition, we examine the use of creditor committees in the current era of sovereign debt, focusing on factors that influence the conduct of debtors and their creditors vis-a-vis each other. Drawing on our observations, we consider the potential value and limitations of creditor committees in the context of sovereign debt governance.

As with other areas of foreign relations law, sovereign immunity has traditionally been treated as exceptional, an area of executive branch primacy. However, since the end of the Cold War, exceptionalism has given way to normalization, as the United States Supreme Court has grown increasingly assertive in rejecting executive branch dominance in matters of foreign relations. In parallel, a boom in economic globalization and international investment law has created new avenues for disputes between foreign investors and sovereign states. These trends have magnified questions about the relationship between investment disputes and national courts. Yet, in the United States, this relationship remains poorly defined. The Court gave some consideration to this question in BG Group PLC v. Republic of Argentina, its first encounter with treaty-based international investment arbitration, but fundamental uncertainties remain. The Foreign Sovereign Immunities Act of 1976 (FSIA) provides the sole basis for obtaining jurisdiction over foreign sovereigns in courts of the United States. However, since the adoption of the FSIA, developments in global commerce and international law have dramatically altered the landscape for investor-state disputes. Among them is the international system for investorstate dispute settlement (ISDS), a treaty-based system for resolving disputes between foreign investors and sovereign states. This Article observes that the FSIA has grown out of sync with global commerce and international investment law. In doing so, this Article considers the relationship between national courts and the ISDS system in the context of the normalization versus exceptionalism debate in foreign relations law.

As tensions between investors’ rights and sovereign power escalate, investor–state dispute settlement (ISDS) has become a focal point of backlash and controversy. As a result, ISDS now embodies two opposing currents in international law: (1) the erosion of sovereignty that accompanied economic globalization, trade frameworks, and investment treaties following the Second World War and (2) more recently, reassertions of sovereignty prompted by recent backlashes against the global economic order. This article measures and evaluates outcomes of the ISDS system for sovereign participants. Using the best available data, this article contributes more detailed assessments of sovereign winners (home states of claimants) and sovereign losers (respondent states) in the ISDS system. This article also considers the distribution and the proportional impact of outcomes for sovereign participants, both of which are fundamental in the legitimacy debates surrounding the ISDS system.

American Business Law JournalVolume 54, Issue 1 p. 9-60 Original Article Puerto Rico's Debt Dilemma and Pathways Toward Sovereign Solvency Stephen Kim Park, Stephen Kim ParkSearch for more papers by this authorTim R Samples, Tim R SamplesSearch for more papers by this author Stephen Kim Park, Stephen Kim ParkSearch for more papers by this authorTim R Samples, Tim R SamplesSearch for more papers by this author First published: 27 January 2017 https://doi.org/10.1111/ablj.12094 The authors wish to thank Anna Gelpern, Mitu Gulati, Mark Weidemaier, Lee Buchheit, Cate Long, Charles Blitzer, and Chanda DeLong, as well as colleagues, friends, and family, for their comments and encouragement. This article received the Holmes-Cardozo Award for Best Submitted Conference Paper at the 2016 Annual Conference of the Academy of Legal Studies in Business. Prior versions of this article were also presented at the Interdisciplinary Sovereign Debt Research and Management Conference at Georgetown University Law Center in 2016 and the 2015 Annual Conference of the Southeastern Academy of Legal Studies in Business. All errors and omissions are our own. Read the full textAboutPDF ToolsExport citationAdd to favoritesTrack citation ShareShare Give accessShare full text accessShare full-text accessPlease review our Terms and Conditions of Use and check box below to share full-text version of article.I have read and accept the Wiley Online Library Terms and Conditions of UseShareable LinkUse the link below to share a full-text version of this article with your friends and colleagues. Learn more.Copy URL Share a linkShare onFacebookTwitterLinkedInRedditWechat Volume54, Issue1Spring 2017Pages 9-60 RelatedInformation

The global sovereign debt market, lacking a formal bankruptcy regime or binding regulatory oversight, is fundamentally shaped by the specter of conflicts between debtors that refuse to pay and holdout creditors that refuse to settle. Never was this more evident than in Argentina’s most recent sovereign debt crisis, which spurred daring, innovative, and often controversial legal strategies. This Article focuses on one of the legacies of Argentina’s sovereign debt crisis: the use of investor–state arbitration under international investment law to enforce sovereign bond contracts. Following Argentina’s financial collapse in 2001, private creditors brought dozens of cases against Argentina before the International Center for the Settlement of Investment Disputes (ICSID). Among these ICSID cases was Abaclat and Others v. The Argentine Republic, which marked the first time that an arbitral tribunal ruled that it had jurisdiction to rule on a sovereign debt default and restructuring under international investment law. With the proliferation of investor–state dispute settlement (ISDS) mechanisms in bilateral investment treaties (BITs) and other international investment agreements, this remedy will likely grow in importance. In light of Abaclat and subsequent ICSID cases, this Article analyzes Argentina’s experience with sovereign debt claims under BITs in the broader context of sovereign debt disputes and ongoing measures undertaken by sovereigns in response to tribunalization. Looking forward, this Article assesses the systemic implications of ISDS for the exercise of sovereign authority in sovereign debt finance.

The global sovereign debt market, lacking a formal bankruptcy regime or binding regulatory oversight, is fundamentally shaped by the specter of conflicts between debtors that refuse to pay and holdout creditors that refuse to settle. Never was this more evident than in Argentina’s most recent sovereign debt crisis, which spurred daring, innovative, and often controversial legal strategies. This Article focuses on one of the legacies of Argentina’s sovereign debt crisis: the use of investor–state arbitration under international investment law to enforce sovereign bond contracts. Following Argentina’s financial collapse in 2001, private creditors brought dozens of cases against Argentina before the International Center for the Settlement of Investment Disputes (ICSID). Among these ICSID cases was Abaclat and Others v. The Argentine Republic, which marked the first time that an arbitral tribunal ruled that it had jurisdiction to rule on a sovereign debt default and restructuring under international investment law. With the proliferation of investor–state dispute settlement (ISDS) mechanisms in bilateral investment treaties (BITs) and other international investment agreements, this remedy will likely grow in importance. In light of Abaclat and subsequent ICSID cases, this Article analyzes Argentina’s experience with sovereign debt claims under BITs in the broader context of sovereign debt disputes and ongoing measures undertaken by sovereigns in response to tribunalization. Looking forward, this Article assesses the systemic implications of ISDS for the exercise of sovereign authority in sovereign debt finance.

A wave of multi-state audits on the insurance industry’s use of the Social Security Administration’s Death Master File (DMF) stirred national controversy over the status of unclaimed life insurance proceeds. Multi-state investigations uncovered “asymmetric” use of the DMF among many large insurance companies. Accusations of unethical behavior led to numerous settlement agreements between state regulators and insurers. Payouts and fines stemming from these settlements already number in the billions of dollars.Legislative responses are also underway. Some states have adopted — and others are considering — legislation requiring life insurers to search the DMF to identify and pay (or eascheat) unclaimed death benefits. Currently, legislative responses vary among the states, underscoring the longstanding tension between uniformity and state-centric regulation of insurance in the United States. Some states have imposed DMF search requirements on a prospective basis. Others have attempted to apply such requirements on a retroactive basis, affecting both new and existing policies.Emerging legislation on unclaimed life insurance has significant implications for consumers, insurance markets, and even state finances. This Article focuses on the crucial question of retroactive versus prospective applicability of legislation on unclaimed life insurance benefits. In considering the financial implications and legal dimensions of this question, this Article concludes in favor of prospective applicability. Though presumably well intentioned, the downsides of retroactive legislation on unclaimed life insurance benefits outweigh the upsides.

NML v. Argentina, the “trial of the century” in sovereign debt, is finally poised for settlement negotiations. International experience, advantages for the parties themselves, and even statements by the presiding federal judge, all suggest that it is high time for a settlement between Argentina and its holdout creditors. But major challenges remain.While not addressing all of them, we analyze key economic and legal factors underlying the NML litigation, with a particular emphasis on issues relevant to a potential settlement. We document the wide heterogeneity of holdout rates across Argentina’s 150 defaulted bonds (of which 74 still have holdout rates greater than 5 percent) and focus the subsequent analysis on the seven most held-out bonds. The bonds in our sample have holdout rates between 20 and 82 percent and account for about 30 percent of total holdout principal. We show that New York’s statutory real rate of interest on overdue interest has been 6.6 percent on average during the years affecting this suit compared to 3.1 percent during the previous forty years. As such, the New York statutory rate has become more punitive than compensatory.We also illustrate the growth of the value of holdout claims for the seven bonds from their initial $1.7 billion in principal up to $4.3 to $7 billion in current value, depending on when holdouts obtained judgments. We analyze the sensitivity of holdout claims to different approaches to overdue interest—an issue that has become increasingly controversial in New York state law in recent years. We next assess the returns that investors would have obtained by purchasing the seven-bond basket at different times since 2002. We find that investors would have multiplied their money an average of 8 times if they obtained judgments in 2008 or 13 times in 2015. Finally, we compute the current value of Argentina’s 2005 exchange offer and find that is worth about one-half of the litigants’ claims for judgments obtained in 2008.Our analysis offers a framework for potential settlement negotiations. However, with so many holdouts unaccounted for, a settlement with the NML litigants exposes Argentina to the tyranny of the next litigant as long as the current injunctions remain in place. We close by underscoring the benefit of modifying or lifting these injunctions as Argentina begins negotiating in good faith to reach a reasonable settlement with its holdout creditors.

The 2013-14 Energy Reform is arguably Mexico’s most significant structural change in the last fifty years. As the fiscal backbone of the Mexican state, the energy sector is critically important to Mexico’s future. But the outcome of the Energy Reform also has powerful implications for North America and global energy markets.

Sovereigns are unique market participants in the global financial system, and sovereign debt markets largely operate in a legal and regulatory void. This Article adds an important and timely perspective by examining the concept of equity in sovereign debt finance. Governments, unlike corporations, rely almost exclusively on debt to externally finance their investments and operations. GDP-linked securities, which provide interest payments indexed to the sovereign issuer’s rate of growth, are sovereign debt instruments with certain equity-like characteristics. This Article considers whether innovation towards sovereign equity can help mitigate problems associated with sovereign debt crises. To address this question, we analyze the use of GDP-linked securities in recent sovereign debt restructurings by Argentina, Greece, and Ukraine. Drawing on this analysis, we explore more broadly the legal implications of sovereign equity, and conclude that these applications offer opportunities to help manage sovereign finance in the absence of readily enforceable international financial regulation.

Coined the "trial of the century" in sovereign debt litigation, NML v. Argentina (NML) involves a radical departure from the traditional unenforceability of sovereign debt contracts in favor of the opposite extreme: enforcement through potent injunctive remedies applicable to third parties. Problems with the NML precedent could extend far beyond Argentina's immediate situation. NML is the latest landmark in a trend that creates serious uncertainties for sovereign debt markets-a major concern for sovereigns, their creditors, and financial institutions around the world. This Article argues that NML creates "bad law" by overcompensating for unenforceability problems with an ambitious reading of the pari passu clause and supercharged injunctive remedies. As a practical matter, the milk is spilled; "rogue" precedent now exists. But until broader solutions for problems in sovereign debt are available, there are compelling grounds for other courts to apply the NML precedent as narrowly as possible. In addition to the extraordinary factual circumstances of NML, the Second Circuit provided a starting point for distinguishing NML from future cases.

This paper addresses the evolution of energy law in Mexico, the current situation of Petroleos Mexicanos (Pemex), and the outlook for energy reform under the administration of President Enrique Pena Nieto. In doing so, this article provides constructive commentary on potential models and key areas for reform.

I. INTRODUCTION II. THE PRESENT: PEMEX IN THE TWENTY-FIRST CENTURY A. Declining Production Since 2004 B. Consequences of Declining Production C. Reasons Behind Declining Production: the Situation. D. Solutions to the Production Conundrum III. THE PAST: PETROLEUM LAWS IN MEXICO A. The Constitution of 1917 B. The Expropriation of 1938 and the Origins of Pemex C. The Petroleum Law of 1958 D. Pemex Since the 2008 Energy Reform IV. THE FUTURE: CURRENT OUTLOOK FOR ENERGY REFORM A. The Elections of 2012 B. Potential Models for Reform in Mexico C. Outlook for Reform Under Pena Nieto Wisdom lies neither in fixity nor in change, but in the dialectic between the two. La sabiduria no esta ni en la fijeza, ni en el cambio, sino en la dialetica entre ellos. --Octavio Paz, The Monkey Grammarian I. INTRODUCTION Petroleos Mexicanos (Pemex) is Mexico's national oil company. (1) Pemex is simultaneously known as the cow and cow of Mexico. (2) As a cash cow, Pemex is often responsible for more than one-third of the Mexican government's revenues. (3) As a sacred cow, Pemex is a profoundly important symbol of Mexican sovereignty and independence, on par with cultural icons like the Virgin of Guadalupe and the Mexican flag. (4) But these dual roles are increasingly at odds. Pemex is burdened by the enormous tax obligations of a cash cow, yet--as a sacred cow--is handcuffed by strict constraints under Mexican law. (5) Pemex is currently struggling to balance these roles while also adapting to a challenging and unfamiliar production environment. (6) The future of Mexico is closely tied to the future of Pemex. Pemex is the largest oil producer in Latin America and is among the four largest producers in the world. (7) Pemex is wholly owned by the Mexican government and has a monopoly over many facets of the Mexican petroleum industry, including the exploration and production of hydrocarbons. (8) As a fiscal engine of the Mexican state--responsible for thirty to forty percent of the federal government's income--Pemex affects the lives of nearly all Mexicans. (9) Revenue from Pemex funds public spending on everything from education and health care to public infrastructure and poverty alleviation programs. (10) Pemex is also a major employer of Mexican citizens and is responsible for the country's energy security. (11) Internationally, the future of Pemex is strategically and commercially significant. Mexico is a key energy partner of the United States. (12) Mexico is not a member of the Organization of the Petroleum Exporting Countries (OPEC), and remains among the top three suppliers of U.S. foreign oil imports, alongside Canada and Saudi Arabia. (13) As important as Pemex is from a supply perspective, the company's role as the financial bedrock of the Mexican government is even more important in the current era of U.S.-Mexico relations. Pemex is critical to the stability of the Mexican government, which affects the United States in many important respects. Finally, the international energy industry--including companies from Asia to Europe, and all over the Americas--is keenly interested in investing in Mexico's energy sector. (14) Not by coincidence, Mexico's newly elected president, Enrique Pena Nieto, identified energy reform as the signature issue of his administration. (15) Pena Nieto has committed himself to achieving the meaningful reform that eluded his predecessor. (16) After oil production in Mexico dropped by a quarter in just a few years, then-president Felipe Calderon passed the 2008 Energy Reforms aimed at modernizing Pemex and providing avenues for private participation in the energy sector. (17) Despite many important changes, the 2008 Energy Reforms did not address fundamental obstacles to attracting the foreign investment that Pemex needs. …

This article addresses the fundamental political and legal issues involved in Mexico’s 2008 energy, the new Pemex contracting regime, and the model contract for exploration and production activities under the new regime.