Litigation Support to Demand Accountability for Odious Oil-Backed Debt in South Sudan

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Situation

Between December 2023 and February 2024, the Government of South Sudan entered into a secretive oil-backed loan agreement with the UAE-based Hamad Bin Khalifa Department of Projects. Information about the agreement only became public in April 2024 through media reports and a publication by the United Nations Panel of Experts on South Sudan.

The terms of this loan are hugely detrimental for South Sudan, as they tie up the country’s oil revenue for up to 20 years. Specifically, the agreement provides that all oil delivered as repayment for the EUR12 billion loan will be valued at USD10 discount per barrel, substantially reducing the value of South Sudanese oil exports. The loan’s value far exceeds the borrowing limits set by public finance management laws and substantially increases South Sudan’s debt levels. Moreover, the negotiation process was entirely opaque, bypassing parliamentary approval as required by law and failing to involve any public participation.

In June 2024, four activists from South Sudan, Kenya, Uganda and Tanzania filed a case before the East African Court of Justice (EACJ) against the Republic of South Sudan. The applicants seek, among other declarations, a finding that the loan agreement constituted odious debt, having been contracted in violation of South Sudanese law, the Treaty for the Establishment of the East African Community, the African Charter on Human and Peoples’ Rights, and the African Borrowing Charter. They therefore claim that the agreement was neither binding on nor payable by the citizens of South Sudan. There has been no response to these claims, so the Pan African Lawyers Union (PALU), acting as counsel for the applicants, subsequently sought a default judgment from the EACJ.

ILP’s Action

ILP’s volunteer lawyers supported PALU by conducting comparative international legal research on default judgments in regional human rights courts, including the EACJ, the African Court on Human and Peoples’ Rights, the Economic Community of West African States Court of Justice, the European Court of Human Rights and the Inter-American Court of Human Rights. This pro bono research contributed to PALU’s application for a default judgment by providing a comparative analysis of the procedural rules governing such judgments.

Impact

While the EACJ has not yet rendered a decision on the case, ILP’s support in strengthening PALU’s legal argument on behalf of the applicants will help advance the rule of law and promote sustainable socio-economic development in South Sudan. A successful legal judgment declaring the state’s actions illegal will promote the enforcement of legal safeguards governing the contraction of sovereign debt, help maintain sustainable debt levels in South Sudan, and strengthen principles of good governance.