The United State District Court in the Southern District of New York has denied a motion by the Government of Sri Lanka to dismiss a lawsuit brought by Hamilton Reserve Bank following the default by the SL Government on a sum of more than $257 million of bonds and interest that Hamilton had invested in.
On September 21, 2022, the Sri Lankan Government filed a motion to dismiss the complaint filed by Hamilton Reserve Bank for bond default.
The Government has asked for the case in New York over the country’s debt default to be dismissed, claiming that the litigation initiated by one bank is an “apparent attempt to gain leverage over a nation in crisis and jump ahead of other international creditors.”
Hamilton Reserve Bank, situated in the Caribbean islands of St. Kitts and Nevis, launched legal action in response to the country’s failure to repay a $1 billion sovereign bond.
The 5.875% International Sovereign Bonds were due for payment on July 25, 2022.
According to court records, Hamilton Reserve Bank has charged Sri Lanka with owing it a total of US$257,539,331.25 under the conditions of the Bonds. The principal is $250,190,000, and the interest is $7,349,331.25.
Denise Cote, Judge of the District Court of the Southern District of New York, on March 24 dismissed the motion filed by the law firm representing the Sri Lankan government. Clifford Chance US LLP.
The case would therefore proceed, to decide on whether the Sri Lankan Government must immediately pay the outstanding amount.
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