Here's a nice example of why there's a value to foreign law in the investment markets. Greece has paid out, in full and at 100%, on an English law bond just after the agreed default and 70% haircuts on all of their Greek law bonds. An object lesson perhaps in our not wanting the people who owe us the money to be the people who can set the rules about how they repay us that money.
Bondholders, who were forced to accept losses of around 75pc on their debt two months ago or lose everything, hired lawyers to claim they were "fraudulently misled" after Athens repaid €435m to debtors who resisted the restructuring.
That claim's not going to go very far but the reason that the two sets of bondholders were treated diferently is the jurisdiction which could change the terms of the bonds:
Not paying the May 15 bond could have triggered so-called cross-default clauses, m eaning that holders of other bonds governed by foreign law that were also not swapped could have demanded immediate payment.
It's all in those two words "foreign law".
Still, the foreign-law distinction is also at the heart of why this bond was paid back.
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