ABSTRACT
Distressed sovereign debt ceases to be a rarity. Sovereign debt crisis has become a contemporary international problem. Often sovereign debt crisis grows into a perpetual nightmare for nations as the process of sovereign debt restructuring is relegated to ad hoc mechanisms of resolution. Despite a long history of financial crisis, there is lack of adequate safeguards and international policy framework to ensure timely and equitable restructuring of sovereign debt. Predatory litigations in domestic jurisdictions arising out of sovereign debt restructuring have become the new arena that manifest dilution of sovereignty. Creditors strategically use litigation targeting the sovereign assets located within the state as well as across jurisdictions. With the sovereign immunity diluted and sovereign space eroded, the sovereign acts and assets have fallen prey to opportunistic legal claims in the absence of an international consensus on the framework for restructuring sovereign debt. With India emerging as an attractive destination for Foreign Direct Investment, it is about time that Indian legislates appropriate rules and regulations that explicitly define the degree, scope and extent of state immunity in India.
