Sovereign-owned entity: Difference between revisions

{{a|netting|File:Who's queen.png}}One of {{t|ISDA}}’s vaunted {{tag|netting}} categories.

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.

 

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