Credit Slips published an article describing the different positions regarding the PDVSA’s 2020 bonds dispute. On one hand Venezuela argues that Venezuelan law determines whether the bonds are valid, on the other hand the indenture trustee argues that Venezuelan law is irrelevant, that New York law is all that matters, and that under New York law the bonds are enforceable.
The article also highlights the New York law frequent use of carve outs that could be interpreted to require the application of the sovereign’s local law to a wide range of issues and one argument of the indenture trustee is that the documentation doesn’t include these carve outs.