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GMSLA Anatomy™
In a Nutshell™ Clause 26:
26. Waiver of Immunity
Each Party waives all immunity it might otherwise have in any legal action relating to this Agreement and agrees not to claim such an immunity during any such action.
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2010 GMSLA full text of Clause 26:
26. Waiver of Immunity
Each Party hereby waives all immunity (whether on the basis of sovereignty or otherwise) from jurisdiction, attachment (both before and after judgement) and execution to which it might otherwise be entitled in any action or proceeding in the courts of England or of any other country or jurisdiction relating in any way to this Agreement and agrees that it will not raise, claim or cause to be pleaded any such immunity at or in respect of any such action or proceeding.
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Template:Sovereign immunity
Sovereign immunity is a particular issue in an agency lending arrangement because:
- Structurally, sovereigns will tend to be lenders in an agency set up
- The Borrower title transfers away a bigger slug of collateral away than it borrows from the sovereign Lender.
- At any point, should the Sovereign decide to play who’s queen, the borrower is in the hole for 5.
Interestingly, a pledge GMSLA might fix this problem by never transferring collateral to the Sovereign in the first place.
See also