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Sovereign immunity: Difference between revisions
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===What [[sovereign immunity]] isn’t=== | ===What [[sovereign immunity]] isn’t=== | ||
[[Sovereign immunity]] can’t immunise a sovereign against parts of a commercial contract she has already performed, since the commoner doesn’t have to take action in that case. If the sovereign pays a sum owed, it stays paid. The sovereign cannot — by legal means — require those moneys to be repaid<ref>To be sure, a bossy sovereign can park its tanks on your lawn, waterboard you, and throw your children to its pet crocodiles of course, but this is a practical act, not a legal one and the [[JC]] cares not one whit for practical, extra-legal acts. What can one say about them, other than, “that was horrid”?</ref>. | [[Sovereign immunity]] can’t immunise a sovereign against parts of a commercial contract she has already performed, since the commoner doesn’t have to take action in that case. If the sovereign pays a sum owed, it stays paid. The sovereign cannot — by legal means — require those moneys to be repaid, except by way of court action, and doubtless your [[legal opinion]]s will tell you that won’t work (and will operate to [[Waiver of immunities - ISDA Provision|waive]] sovereign immunity anyway)<ref>To be sure, a bossy sovereign can park its tanks on your lawn, waterboard you, and throw your children to its pet crocodiles of course, but this is a practical act, not a legal one and the [[JC]] cares not one whit for practical, extra-legal acts. What can one say about them, other than, “that was horrid”?</ref>. | ||
In the context of an {{isdama}}, therefore, all [[payments]], [[collateral]] and [[initial margin]] that a sovereign has ponied up<ref>Assuming you can persuade a sovereign to pony up initial margin of course.</ref> before it decides to cut your legs off, you keep. Your risk is the market movements between the point where it breaches your contract until you can close out your positions. | In the context of an {{isdama}}, therefore, all [[payments]], [[collateral]] and [[initial margin]] that a sovereign has ponied up<ref>Assuming you can persuade a sovereign to pony up initial margin of course.</ref> before it decides to cut your legs off, you keep. Your risk is the market movements between the point where it breaches your contract until you can close out your positions. | ||