Legal Debt Clinic
The Legal Debt Clinic provides in house advice to HIPC countries or Commonwealth member states which are facing or likely to face debt litigations.
The clinic deals with requests from sovereign debtors and assists member countries as well as other non Commonwealth HIPC Countries by briefing counsel where the need arises, it also holds regional seminars to enhance awareness of loan agreements, debt relief and restructuring and proper management of debt.
The Resident Legal Adviser undertakes bilateral visits to countries that are in pressing need in view of the threats of litigation by Commercial Creditors.
Background
At the Commonwealth Heads of Government Meeting in Abuja, Nigeria, in 2003, the Heads of Government recognised that the debt burden in a sovereign state constitutes a major obstacle in allocating resources to develop key socio-economic sectors.
They acknowledged the need for a deeper, broader and more flexible approach to debt relief and debt cancellation in order to achieve long term debt sustainability. The Heads of Government reaffirmed their commitment to a successful Heavily Indebted Poor Country (HIPC) Initiative. They welcomed the advisory and consensus building work of the Member States of the Commonwealth HIPC Ministerial Forum (CHMF) and encouraged its efforts to help HIPC countries to achieve a sustainable exit from debt. The CHMF Ministers in their meeting in Sierra Leone, in March 2004, mandated the current chair together with the Commonwealth Secretariat to explore ways to assist the HIPCs facing litigation. A study was undertaken by the Commonwealth Secretariat seeking to find strategies to deal with sovereign debt in distress. The paper addressed the possibility of having a legal clinic housed in the Law Division of the Commonwealth Secretariat to provide legal advice to HIPC countries as a one Stop Legal Referral Service.
Both the Senior Law Officials of the Commonwealth Law Ministries and the Law Ministers met in London in October 2004 and received this report. At the same time the Finance Ministers too were mobilising support and were engaged in the process of finding strategies to deal with sovereign debt in distress. Finally, in October 2006, at the Law Ministers Meeting in Ghana the Law Ministers expressed their appreciation for the progress already made and endorsed the continuing efforts of the Commonwealth Secretariat to move as quickly as possible to render legal services to HIPC countries through the establishment of a legal clinic in the Commonwealth Secretariat.