October 18, 2020 (Thessherald)–The Qatar National Bank has lodged a fresh complaint and sued South Sudan at the International Centre for Settlement of Investment Disputes (ICSID) for its failure to pay back a $700 million loan.
Five years ago, the Qatar National Bank entered into an agreement with the Central Bank of South Sudan (BSS)and approved a term loan facility of US$700 million at the request of South Sudan.
However, a few years later the world’s youngest nation, failed to abide by the agreement and defaulted on the million dollar loan.
“In May 2015, BSS defaulted on payment obligations it had assumed in connection with the credit facilities provided by the Claimant. As such, the Claimant and BSS entered into a restructuring agreement on 3 February 2016 for the repayment of BSS’s outstanding obligations (the “2016 Agreement”).”
“The Claimant has a long-standing relationship with the Respondents, which dates back to 2012 – not long after South Sudan gained independence from Sudan. Starting in June 2012, further to agreements entered into with BSS (which is the central bank of South Sudan), the Claimant provided credit to be used for the purpose of importing strategic goods to South Sudan, including specific commodities to aid South Sudan’s development such as food and agricultural products, pharmaceuticals, construction materials and refined oil products. This credit facility was increased and renewed thereafter.”
“On 5 April 2018, the Claimant entered into an agreement with South Sudan and BSS to restructure the debt owed to the Claimant and refinance obligations under the 2016 Agreement as well as to increase lending to South Sudan.“This was done by way of the Facility Agreement which was executed by South Sudan as borrower and BSS as guarantor. This Facility Agreement is the subject of the present dispute.
“Under the Facility Agreement, the Claimant agreed to make available to South Sudan a term loan facility of US$700 million. Such amounts were to be used for the purpose of refinancing credit given for the acquisition of goods to aid South Sudan’s development, as well as to support the management of the balance of payments of South Sudan.
“Under the Facility Agreement, the repayment of the amounts provided to South Sudan was anticipated to be spread over a 15 year- period.”
“The Claimant is part of the QNB Group, one of the largest banks in the Middle East, with extensive operations in multiple jurisdictions around the world including in Africa, Europe and Asia. The QNB Group provides banking and financial services, including to corporations and governments,” the Bank said in its recent statement.