The United Nations has voted overwhelmingly for a new global framework for sovereign-debt restructuring aimed at avoiding cases like Argentina's grinding legal battle with "vulture" creditors.
The World Bank and International Monetary Fund have warned that Argentina's struggle with predatory hedge funds that have won U.S. court judgements demanding full repayment of the country's debt highlights a problem that could affect other countries struggling with heavy debts.
One such country is Ukraine, which has had difficulty getting major creditors to accept a debt writedown.
The nonbinding resolution approved on September 10 by 136 UN members, but opposed by the United States, Germany, Japan, and Britain, stresses a nation's right to restructure its debt "as a last resort."
It says member countries should adopt principles that would protect sovereign governments from minority creditors which refuse to go along with the majority in mutually agreed debt restructurings.
It urges courts to "respect the decisions adopted by the majority of the creditors" and says a country "should not be frustrated or impeded by any abusive measures" by minority creditors seeking redress in the courts.
