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One of {{t|ISDA}}’s vaunted {{tag|netting}} categories. | {{a|netting|File:Who's queen.png}}One of {{t|ISDA}}’s vaunted {{tag|netting}} categories. | ||
{{ | {{quote| {{Sovereignownedentity}} | ||
{{Sovereignownedentity}} | <small><small>''[[:template:Sovereignownedentity|view template]]''</small></small>}} | ||
<small><small>''[[:template:Sovereignownedentity|view template]]''</small></small> | |||
}} | ===[[Sovereign immunity]] and [[close-out netting]]=== | ||
Does the fact that a counterparty may have, or may claim, sovereign immunity from legal proceedings before a foreign court (or its own courts, for that matter) invalidate a close-out netting clause? We think not: the close-out mechanism does not require the intervention of any court to work: it is a self-help mechanism. To the contrary, it would only come before a court were the {{isdaprov|Defaulting Party}} to apply to the court to challenge its exercise. And you can’t havce it both ways: a sovereign immunity right only avails you ''if you stay away from court''. The moment a sovereign puts the matter before a court it submits to the court and, QED, waives its immunity. | |||