Odious Debt: Modernizing Ancient Problems

Seth M. Reynolds, Duke University School of Law

Abstract

So far the odious debt debate has primarily focused on proving the existence of a rule of customary international law. Rather than following this tradition, this paper will focus on another method for demonstrating that a certain legal principle should be applied in an international context; general principles of law and equity. The heart of the odious debt debate revolves around the assertion by some that a successor government is absolutely liable for every debt incurred by a previous regime. However, almost every domestic legal regime limits the ability of a creditor to recover from a successor in interest. This paper will demonstrate that if the international community is to apply debt succession principles to international debt transactions which reflect the principles applied in their domestic debt transactions then some form of the odious debt doctrine must be adopted by the international community.