BBC News reports: A High Court judge has ruled that Zambia must pay a substantial sum to a so-called “vulture fund.”
British Virgin Islands-based Donegal International paid less than $4 million (2 million) for a debt the African nation owed, but sued Zambia for a $42 million repayment. It said its bill was the result of interest and costs, but the judge has indicated that Zambia should pay less.
The ruling has angered anti-debt campaigners, who say it will undermine Zambia’s plans for poverty reduction.
The judge ruled against Zambia’s application to dismiss Donegal’s claim, but at the same time proposed to end a freeze of Zambian assets secured by the fund. Donegal, however, will have a chance to argue the case for a continued freeze of Zambian assets.
According to BBC economics reporter Andrew Walker, people familiar with the case believe that the judge will order Zambia to pay Donegal between $10 million and $20 million, less than half what Donegal sought.
Lawyers for Zambia, however, said the judgment was a victory for Zambia. Janet Legrand of DLA Piper called the ruling “fantastic news for both the government of Zambia and its people”. The fight against Donegal’s claim had been “entirely vindicated and [marked] a significant milestone in the efforts of [the Zambian government] to fight corruption and maintain a stable economic course”.