he Federal Republic of Dagobah (“Dagobah”) is // Corellian Republic (“Corellia”) ....welche Länder sind das ?

2014 FDI MOOT PROBLEM
UNCONTESTED FACTS

1. The Federal Republic of Dagobah (“Dagobah”) is deemed an emerging market which, after the
restoration of democracy in the late 1960s, maintained a relatively stable economy until the end
of the 1980s by adopting an inward-oriented development policy, characterized by moderately
free markets.

2. Dagobah has always had close diplomatic and economic relationships with its developed
neighbor, the Corellian Republic (“Corellia”), which has a sophisticated financial and banking
industry. In 1992, the two countries entered into the Agreement between the Corellian Republic
and the Federal Republic of Dagobah for the Promotion and Protection of Investments
(“Corellia-Dagobah BIT”). This Agreement was part of a privatization and internationalization
plan undertaken by Dagobah’s government to stimulate economic growth. The BIT provided for
a definition of protected investments and contained standard clauses of protection such as
national treatment, fair and equitable treatment, full protection and security and protection
against expropriation [Appendix 1].

3. However, in early 2001, after a decade of heavy borrowing on international financial markets,
combined with high government budget deficits, partly caused by massive tax evasion, Dagobah
was faced with an unsustainable debt burden and descended into a two-and-a-half year long
economic crisis.
4. On 7 May 2001, Dagobah’s inability to meet its debt obligations led its government to
restructure its sovereign debt and launch an offer according to which bondholders would be able
to exchange their bonds for new ones to be issued by Dagobah. The new series of bonds would
reduce the bonds’ face value by 43%, as well as provide the possibility of cash buybacks with the
assistance of the World Bank’s Debt Reduction Facility. As the haircut was estimated at 50% of
the bonds’ net present value, such restructuring caused major losses to bondholders, among
which were several investors from Corellia.
5. After becoming aware of the Dagobah crisis and its sovereign debt restructuring, the
International Monetary Fund (“IMF”) presented certain recommendations for Dagobah to
appropriately implement the sovereign debt restructuring process, as well as to prevent further
increase of its debt and another future crisis.

http://fdimoot.org/problem.pdf