Mozambican Illegal Debts: Testing the Odious Debt Doctrine

By: Mauro Megliani


PDF: Mozambican Illegal Debts


In June 2019, the Constitutional Council of Mozambique delivered a judgment declaring a financial transaction arranged by the government in violation of the parliamentary prerogatives in budgetary matters unconstitutional. This was only the tip of an iceberg consisting of a series of transactions tainted with corruption. In the face of this illegality, many antidebt campaigners have invoked the application of the odious debt doctrine to block the enforcement of contractual claims and the availability of restitutionary remedies. Under the odious debt doctrine, a debt is odious if, in the awareness of the creditors, it is contracted without the consent of and not for the benefit of the population. The operation of the odious debt doctrine presupposes an inquiry into its legal status. Lacking a proper normative characterization, the doctrine is to be understood more as a matter of policy than as a matter of law. As a result, its ideal systematic placement would be under the umbrella of transnational public policy. Transnational public policy establishes universal principles to serve the common interests of mankind. The key point, then, is to ascertain whether and to what extent the values enshrined into the odious debt doctrine may belong to the realm of the transnational public policy. In this context, the controversy on the validity of the Mozambican debt can become the touchstone for testing the legal status and operation of the odious debt doctrine.