Doctrine of Odious Debt in International Law

"There has been a considerable amount of recent writing in civil society, legal academia, among commercial lawyers, and in UN agencies and the World Bank about the doctrine of odious debt. The surge in interest arose after the fall of Saddam Hussein's Iraq in 2003, and the claims by senior members of US President George W Bush's administration that Iraq's debt might be regarded as odious. The core idea of the doctrine as traditionally presented is that some sovereign debt claims are not binding or enforceable on account of the creditor's awareness of the fact that the proceeds of the loan would be used to oppress the population of the debtor state, or would be used for personal enrichment rather than public purposes. As this article will show, there has also been a substantial degree of skepticism about the legal status of the doctrine. The precedents are regarded as meager. Courts and tribunals have avoided ruling on its existence. Provisions on odious debt were deliberately omitted in the one relevant treaty on state succession to public debts. And the picture has been complicated by the existence of a widely diverging range of understandings of the doctrine, and especially of the putative requirement that public debts be for public purposes"--