1. See for a discussion Burdeau, G., ‘Du deuxième au troisième amendement aux statuts du Fond Monétaire International, Le Problème des arriéres’, 119 Clunet (1992) pp. 70–79Google Scholar.

2. Ibid. at p. 22, cf., ‘Statement by the Managing Director on the Strengthened Cooperative Strategy on Overdue Financial Obligations to the Fund’, EBM 90/38,16March 1990 and attachment, Selected Decisions and Selected Documents of the International Monetary Fund, 18th edn. (1993) p. 185 et seqGoogle Scholar.

3. See on this distinction, Rosenne, S, Breach of Treaty (1985) pp. 3–8Google Scholar.

4. Address by the Managing Director, Summary Proceedings of the Annual Meeting of 1988, p. 26.

5. Address by the Chairman of the Interim Committee, Ibid. P.30.

6. Art. V, 7 Fund Agreement. Repurchase means buying back the balance of the State's currency that it supplied to the Fund in return for Fund credit in the form of convertible currencies. Careau, Flory and Giullard describe the Fund's ordinary credits as follows: ‘Cette opération consiste en un achat par un pays membre de devises étranger en échange de sa propae monnaie. Le F.M.I. vend ainsi au comptant les monnaies de ses membres contre achat à terme’, Droit International Economique, 3rd edn. (1990)p. 378Google Scholar; cf.Hahn, H.J., ‘V ölkerrechtlicheDarlehens-und Garantieabkommen’, in Völkerrecht, Recht der International Organisationen, Weltwirtschaftsrecht, Festschrift für I. Seidl-Hohenveldern (1988) pp. 173–196, at p. 173Google Scholar, an English version of the latter article appears in Vosküil, C.C.A., Paraç, Z. and Wade, J.A., eds., Hague-Zagreb Essays, 6 (1987) pp. 4–31Google Scholar.

7. See infra section 2.2. The General Department consists of the General Resources Account and the Special Disbursement Account. The bulk of transactions between the Fund and its members (including repurchases) takes place through this account. See generally Financial Organization and Operations of the IMF, IMF-Pamphlet no. 45, 3rd edn. (1993)Google Scholar.

8. The SDR Department conducts all transactions and operations involving SDRs. See on SDRs, Gold, J., ‘Development of the SDR as Reserve Asset, Unit of Account, and Denomitator: A Survey’, 16 George Washington Univ. Jil & Econ. (1981)Google Scholar.

9. A Trust Fund was established in 1976 to provide balance of payments assistance on concessional terms to certain members. See Gold, J., ‘Trust Funds in International Law’, 72 AJIL (1978) pp. 856–866Google Scholar. This Fund is now being wound up and the resources it has received since 30 April 1981 are being transferred to the Special Disbursement Account (of which up to SDR 750 million is to be tranferred to the Supplementary Financing Facility Subsidy Account). See Gianviti, F., ‘The International Monetary Fund and External Debt’, 215 Hague Recueil (1989–III) p. 229Google Scholar.

10. IMF Annual Report (1993) p. 90. The SAF was established in March 1986 under the Special Disbursement Account (supra n. 6) of the General Department with resources accruing over the period 1985–1991 from repayments of Trust loans totalling about SDR 2.7 billion (supra n. 9).

11. The ESAF, established in 1988, is an additional lending facility operating concurrently with the SAF. It is financed from two Fund-related sources, the Special Disbursement Account and the Enhanced Structured Adjustment Facility Trust, and it includes the possibility that other lenders might support enhanced structural adjustment arrangements through loans to qualifying members in association with loans under the ESAF.

12. This was, however, not a claim asserting preferred creditor status as a matter of positive law, see Martha, R.S.J., ‘Preferred Creditor Status under International Law’, 39 ICLQ (1990) pp. 801–827CrossRefGoogle Scholar.

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14. Supra n. 6.

15. Art. V, 8(c); see Gold, J., Legal and Institutional Aspects of the International Monetary System: Selected Essays, vol. II (1982) pp. 156–157Google Scholar.

16. Supra n. 13.

17. Pursuant to Executive Board Decision 8165(81/189)G/TR of December 1985, as amended, the Fund also charges moratory interest in the two latter cases.

18. Gold, , op. cit. n. 15, at pp. 157–160Google Scholar.

19. Ibid. at p. 438.

20. See generally Rama-Montaldo, M., ‘International Legal Personality and Implied Powers of International Organizations’, 44 BYIL (1970) pp. 111–155Google Scholar.

21. Cf., Burdeau, , loc. cit. n. 1, at p. 78Google Scholar.

22. Ibid. at p. 79; on the situation prior to the Second Amendment, see generally Gold, J., ‘The “Sanctions” of the International Monetary Fund’, 66 AJIL (1972) pp. 737–762CrossRefGoogle Scholar.

23. ILA Conference Report, 63rd Conf., Warsaw, 21–27 August 1988, pp. 20–23.

24. Cf.,Haile-Marian, Y., ‘Legal and Other Justifications for Writting-off Debts of Poor Third World Countries: The Case of Africa South of the Sahara’, 24 J. World Trade. (1990) pp. 57–70Google Scholar, especially at pp. 59 and 69, although his plea suggests something of the nature of laesio enormis. On the distinction between laesio enormis and the clausula rebus sic stantibus, see Brierly, J.L., The Law of Nations, 6th edn. (1963) p. 336Google Scholar; see also for a more radical approach Vazquez, R.T., ‘A Proposed Theory of Repudiation of Debt in International Law’, Philippine LJ (1986) pp. 302–348Google Scholar. See also Rosenne, , op. cit. n. 3, passimGoogle Scholar; but see sceptically, Gianviti, , loc. cit. n. 9, pp. 239–240Google Scholar. See for an extensive analysis, de Vos, A.E., Remedies or Strumbling Blocks? – The Public International Law Aspects of the International Debt Crisis, dissertation at the University of Nijmegen (1993) pp. 51–74Google Scholar.

25. Art. 5, Vienna Convention on the Law of Treaties (1969).

26. See the Vienna Convention on the Law of Treaties between States and International Organizations and between International Organizations (1986). Unlike the use of the general resources of the Fund, the Articles of Agreement contain no provisions concerning the repayment of loans obtained from the Special Disbursement Account (Art. V, 12(f)). The repayment requirements are listed in the Trust Instrument and are consented to by members whenever they enter into a loan agreement with the Fund as a Trustee of the Trust Fund. See Decision No. 6358–(79/188) TR, of December 19,1979, as amended, and Decision No. 7142–(82/85)TR, of June 18,1982, as amended. The same is true for the fiduciary funds administered pursuant to Article V, 2 (b).

27. Proposed Second Amendment of the Articles of Agreement of the Fund, March 1979. A Report by the Executive Directors to the Board, Reprinted in Garritsen-de Vries, M., The International Monetary Fund 1972–1978, vol. Ill (1985) pp. 317–376, at p. 335Google Scholar.

28. Idem.

29. Idem.

30. The International Law of External Debt Management, ILA Conference Report, supra n. 23, pp. 419–440Google Scholar.

31. Ibid. at p. 431.

32. Ibid. at p. 22.

33. Supra n. 27, at p. 336Google Scholar. See for an example of postponement before the Second Amendment, Horsefield, J.K., The International Monetary Fund 1945–1965, vol. I (1969)p. 414Google Scholar; see also Vries, Garritsen-de, op. cit. n. 27, at p. 567Google Scholar, but see Gold, J., Membership and Nonmembership in the International Monetary Fund (1974) p. 342Google Scholar.

34. See on these provisions Gold, , op. cit. n. 15, vol. I (1979) p. 380Google Scholar.

35. Supra n. 9, Executive Board Decision No. 5069–(76/72), May 5, 1976.

36. Supra n. 10.

37. But see Socobel Case, Judgment of 15 June 1939, PCIJ Ser. A/B, 78.

38. Cf., also Verzijl, J.H.W., The Jurisprudence of the World Court, vol. I (1965) p. 593Google Scholar.

39. Supra n. 30, at p. 427Google Scholar.

40. Idem.

41. ILC Yearbook 1980 vol. II, Part 2, p. 34Google Scholar.

42. Infra section 4.2.

43. Supra n. 30, at p. 432 (para. 25)Google Scholar, ILA Res., ibid. at p. 22 (clause 11).

44. ILA Res. clause 11: ‘A State of necessity does not have the legal effect of terminating an affected obligation. It is limited to a suspension of the obligation to pay during the existence of the state of necessity; subsequently the obligation will revive. The losses arising out of the non-fulfilment of the original obligation must be allocated among the parties according to equitable principles’.

45. Reuter, P., Introduction to the Law of Treaties (1989) p. 145Google Scholar.

46. Ibid. p. 146.

47. Idem.

48. ILC Yearbook 1978 vol. II, Part 2, p. 69Google Scholar, Vos, de, op. cit. n. 24, at pp. 69–74Google Scholar.

49. Op. cit. n. 45, at p. 145Google Scholar.

50. Th. Wälde, ‘The Sanctity of Debt and Insolvent Countries: Defenses of Debtors in International Loan Agreements’, in Sassoonand, D.M. and Bradlow, D.D., Judicial Enforcement of International Debt Obligations (1987) pp. 119–146, at pp. 142–143Google Scholar.

51. Delaume, G.R., Legal Aspects of International Lending and Economic Development Financing (1967) pp. 158–160Google Scholar.

52. See ILC Yearbook 1978, op. cit. n. 48, p. 133Google Scholar.

53. Supra n. 37.

54. Cf.,Verzijl, , op. cit. n. 38, p. 593Google Scholar.

55. PCIJ Series C, No. 78 (1939) pp. 99–102Google Scholar.

56. Ibid. p. 167.

57. Ibid. p. 237.

58. See for a discussion, Rossenne, , op. cit. n. 3, pp. 70–72Google Scholar.

59. Ibid. p. 71.

60. See also Bothe, M. and Brink, J., ‘Public Debt Restructuring, the Case for International Economic Co-operation’, 29 GYIL (1986) pp. 86–110, at pp. 91–94 and 98Google Scholar.

61. Ibid. pp. 102–106; for earlier State practice, see Verzijl, J.H.W., International Law in Historical Perspective, Vol. VI (1973) p. 781Google Scholar.

62. ICJ Rep. (1949).

63. ICJ Rep. (1980).

64. Gonzalez, M. Perez, ‘Les organisations Internationales et le droit de la responsabilité’, RGDIP (1988) pp. 62–102, at 73–75Google Scholar.

65. Starke, J.G., Introduction to International Law, 10th edn. (1986) p. 304Google Scholar.

66. Cf.,Bothe, & Brink, , loc. cit. n. 60, p. 92Google Scholar.

67. See Chorzow Factory (Indemnity) Case, PCIJ, Series A, No. 17 (1928) p. 47.

68. See for a survey under general international law, ILC Yearbook 1978, op. cit. n. 48, pp. 61–227Google Scholar, and Vos, de, op. cit. n. 24, at pp. 65–80Google Scholar.

69. See for an analysis Lauterpacht, , op. cit. n. 13, pp. 143–146 and 257–258Google Scholar.

70. Constantinople, July 22/August 4, 1910, Art. 3: ‘The questions in dispute and made upon which parties ask the arbitral tribunal to render a defintive decision are as follows: I. Whether or not the Imperial Ottoman Government must pay the Russian claimants interest-damages by reason of the dates on which the said Government made payment of the indemnities determined in pursuance of Article 5 of the treaty of January 27/February 8, 1879, as well as of the protocol of the same date? II. In case the first question is decided in the affirmative, what should be the amount of these interest-damages?’, ibid. p. 326.

71. Ibid. p. 313.

72. Lauterpacht, , op. cit. n. 13, pp. 144–145Google Scholar. Cf.,Verzijl, , op. cit. n. 61, at p. 763Google Scholar. Other international cases involving the issue of moratory interest include French claims against Peru (France/Peru), 11 October 1921,1 UNRIAA, pp. 217–221; Ottoman Public Debt (Bulgaria, French Mandate States, Iraq, Palestine, Greece, Italy and Turkey/Council of the Ottoman Public Debt), 18 May 1925, ibid. pp. 532–614; Joseph Fatovich (Italy/USA), 10 February 1947, XIV UNRIAA, pp. 191–200. See Schönle, H., ‘Intéréts moratoires, intérets de retard en arbitrage international’, Etude de droit international en l’honneur de Pierre Lalive (1993) pp. 649–670Google Scholar.

73. The financial transactions and operations of the Fund are conducted through the so-called General Department, the SDR Department, and the Administered Accounts. See Chandavarkar, A.G., The International Monetary Fund – Its Financial Organisations and Activities, IMF-Pamphlet No. 42 (1984)Google Scholar and Gianviti, , loc. cit. n. 9Google Scholar.

74. The obligation to repurchase is expressed in Art. VII, 7 of the Fund's Articles, supra n. 6.

75. Decision No. 8165-(85/189), G/TR, 30 December 1985, as amended.

76. Decision No. 8165-(85/189), para. I, expressly based on Art. V, 8(c).

77. Ibid. para. II, notably without mentioning the legal basis.

78. Ibid. para. III, notably without mentioning the legal basis.

79. Chorzow Factory Case, PCIJ, Ser. A, No. 17 (1928) p. 47.

80. See supra. For a discussion of the issue of moratory interest in international law Lauterpacht, , op. cit. n. 13, pp. 143–146 and 257–258Google Scholar.

81. ILC Yearbook 1989 vol. II, Part One, p. 30Google Scholar; Special RaporteurArrangio-Ruizemphasized the need to distinguish decisions which simply adjust an ill-defined negative precedent (Christern and Company Case, X UNRIAA, p. 424), decisions which, while relating to previous case law, indicate, however, that in special circumstances the mechanism of compound interest could be useful in fulfilling the requirement of compensation (British claims in the Spanish Zone of Morocco, II UNRIAA, p. 650 and Norwegian Shipowners Claims, I UNRIAA, p. 341), decisions which consider that in specific cases the compound interest mechanism results in a sum which exceeds by far the actual lucrum cessans (Naulilaa Arbitration, II UNRIAA, p. 1074), and decisions which, on the contrary, consider that compound interest, while applicable in principle, would lead in the specific case to insufficient compensation (Fabiani Case, Moore, J.B., Digest of International Law (1906) pp. 4878–4915Google Scholar. In the Compagnie d’électricité de Varsovie Case (Merits) (III UNRIAA, p. 1699) compound interest was allowed only from the date up to which the injured party had calculated the amount of damage it had sustained. See also the Chemins de Fer Zeltweg-Wolfsberg et Unterdraugburg- Woellan Case (ibid. p. 1808). The foregoing confirm Mann's criticism of R.J. Reynolds Tobacco v. Iran (IRAN-US CTR, vol. 8, p. 298) and Anaconda-Iran v. Iran (IRAN-US CTR, vol. 13, p. 199): Mann, F.A., ‘Compound Interest as an Element of Damage in International Law’, in Mann, Further Studies in International Law (1990) pp. 376–285Google Scholar.

82. See on compensatory interest in international law, Subilia, , op. cit. n. 13Google Scholar and ILC Yearbook 1989, op. cit. 13Google Scholar.

83. See Lauterpacht, , op. cit. n. 13, at p. 257Google Scholar.

84. Supra n. 13, p. 316.

85. Brownlie, I., System of the Law of Nations – State Responsibility (1983) p. 228Google Scholar.

86. PCIJ, Ser. A, No. 1 (1923) p. 32.

87. Cf.,Brownlie, , op. cit. n. 85, at p. 229Google Scholar and ILC Yearbook 1989, op. cit. n. 13, pp. 28–29Google Scholar.

88. Del Rio Case, X UNRIAA, p. 697 et seq.; but see ILC Yearbook 1989, op. cit. n. 13, at pp. 24–25Google Scholar.

89. Brownlie, , op. cit. n. 85, at p. 229Google Scholar; similarly, Verzijl, , op. cit. n. 61, at p. 767Google Scholar.

90. Cf., ILC Yearbook 1989, op. cit. n. 13, at p. 28Google Scholar; see on the terminus a quo and terminus ad quem, Verzijl, , op. cit. n. 61, pp. 765–768Google Scholar.

91. Supra n. 13, p. 317. Verdross notes that, since the duty to pay reparations presupposes damage caused by a wrongful act, it is obvious that a State has no obligation to pay reparations in cases involving circumstances that preclude wrongfulness in a specific case: Verdross, A., Derecho International Publico, 5th. edn., transl. Serra, A. Truyol y (1976) p. 387Google Scholar; but see Art. 35 of ILC Draft Articles and clause 11 of the ILA's 1988 resolution on international monetary law.

92. Ibid. pp. 317–318.

93. Ibid. p. 318.

94. See on the difference between these concepts, ILC Yearbook 1978, op. cit. n. 48, pp. 68–74Google Scholar.

95. Supra n. 13, p. 318.

96. ILC Yearbook 1978, op. cit. n. 48, pp. 71–72Google Scholar, fn. 37 and ILC Yearbook 1980, p. 36Google Scholar.

97. Cf., Art. 31 ILC Draft Articles, supra.

98. Mann, F.A., The Legal Aspect of Money, 5th edn. (1992) p. 86Google Scholar.

99. PCIJ, Series A, No. 13 (1928–1930).

100. Ibid. p. 120. Bothe & Brink state: ‘In the case ofmonetary obligations there is no impossibility in this sense, money being always available’, loc. cit. n. 60, p. 93Google Scholar.

101. Aréchaga, E. Jimenez de, ‘International Responsibility’, in Sørensen, M., ed., Manual of Public International Law (1968) p. 544Google Scholar; Aréchaga, E. Jimenez de and Tanzi, A., ‘International State Responsibility’, in Bedjaoui, M., International Law: Achievements and Prospects (1992) pp. 347–381 at pp. 354–346Google Scholar.

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103. Rejoinder of 15 December 1938, supra n. 55, p. 167. Cf., the view of the Government of South Africa, ILC Yearbook 1978 vol. II, para. 64Google Scholar.

104. Ibid. p. 237.

105. In addition to force majeure and state of necessity, international law considers binding resolutions of the Security Council, consent, countermeasures in respect of an internationally wrongful act, distress and self-defence as circumstances precluding wrongfulness; see Arts. 29, 30, 32 and 34 ILC Draft Articles, supra.

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107. I.e., financial relations not created under and governed by public international law. See Hecke, G. van, Problèmes juridiques des emprunts internationaux (1964) pp. 17–34Google Scholar.

108. Chorzow Factory Case, supra n. 67.

109. Interpretation of the Greco-Bulgarian Agreement of December 9th, 1927, PCU Series A/B, No. 45.

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112. Cf., Riphagen, ibid. p. 3.

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116. Cf.,Mann, F.A., Studies in International Law (1973) pp. 605–606Google Scholar.

117. Idem.

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121. Ibid. p. 356.

122. IMF Annual Report (1991) p. 67.

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