New York Federal Court rules in favor of Hamilton Reserve Bank against Sri Lanka bond default. Clifford Chance’s defense defeated.
US$280 million New York Court Judgment if Bond is not repaid.
Sri Lanka was supposed to pay 5.875% interest on its international sovereign bond on July 25, 2022, but it was unable to do so due to the country’s ongoing financial crisis.
The Hamilton Reserve Bank has demanded full payment of the $250 million owed, citing interest of more than $7 million.
The bondholder has retaliated against the Sri Lankan government, claiming that the country’s default was orchestrated by people at the highest levels of government and that the Rajapaksa family was to blame.
The Sri Lankan government has asked a US judge to dismiss the case filed by Hamilton Reserve Bank for defaulting on bonds, the financial news agency Bloomberg reported.
The government had requested that the case in New York be dismissed over the country reaching debt default, stating that the case brought by one bank is an “apparent attempt to gain leverage over a nation in crisis and jump ahead of other foreign creditors.”
Hamilton Reserve Bank, based in the Caribbean islands of St. Kitts & Nevis, filed legal action citing the country’s default on a $1 billion sovereign bond.
The 5.875% interest International Sovereign Bonds were due for payment two months ago on July 25, 2022