Clauses & Controversies Ep 166 - Imperial (Defaulted) Chinese Bonds (Again)
Dec 1, 2025
A new legal case about defaulted Imperial Chinese bonds has ignited interest once more. The hosts explore intriguing plaintiff identities and the entertaining context behind them. They dive into the old bond structures and propose a modern interpretation involving pari-passu clauses. Key discussions include overcoming statute of limitations hurdles and the complexities of U.S. courts' reach under the Foreign Sovereign Immunities Act. Historical evidence, like U.S. bank participation, adds depth to the argument, sparking frustration over the dismissive judicial opinions.
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Century-Old Clauses Can Resemble Modern Rights
- Old imperial Chinese bonds include contractual protections that function like modern pari-passu clauses.
- Plaintiffs argue current Chinese debt payments repeatedly breach those century-old promises, creating ongoing violations.
Treating Payments As Continuing Breaches
- Plaintiffs say each payment on modern Chinese bonds is a new breach that restarts the limitations clock.
- That theory aims to avoid time-bar defenses by framing the harm as continuing, not historical.
FSIA Dismissal Sidestepped Time-Barrier Debate
- The district court dismissed on Foreign Sovereign Immunities Act (FSIA) grounds without deeply engaging the statute-of-limitations theory.
- Judges treated the plaintiffs' framing as a litigation tactic rather than a substantive continuing-violation claim.