Template:Sovereign immunity and closeout: Difference between revisions

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 remedy. You terminate, net off and walk away.<ref>Only if you are still owed money might you seek a court’s assistance, but that is ''post'' netting debt recovery, when you were ''still'' owed money after netting had worked its wristy magic.</ref> 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. <br>