This final chapter argues that in accordance with the standard jurisdictional clauses in modern debt instruments, national courts are the proper forum for any dispute arising out of sovereign debt. In the present state of international law, ICSID tribunals – in addition to lacking jurisdiction – are unable to effectively deal with sovereign debt crises. Their intervention would upset longstanding expectations in the sovereign debt market and raise several macroeconomic policy concerns. This conclusion does not imply that arbitration lacks potential in relation to dealing with sovereign defaults in the future, should states consent to such adjudication and set up suitable arbitral machinery.

The chapter canvasses important consequences of ICSID arbitration on sovereign debt. For one, ICSID jurisdiction and liability could escalate sovereign debt disputes to new levels, and substantially increase incentives to holdout in future debt restructurings. It would also raise a host of macroeconomic policy concerns, in addition to defeating the longstanding expectations of dispute settlement in national courts.

First, as functional control over international enforcement of sovereign debt instruments shifted from governments to individual creditors, creditor governments would lose their traditional role as diplomatic gatekeeper over sovereign debt. Economic policy flexibility in sovereign debt crises would shrink. Consideration of creditor claims would move further into the adjudicative realm.