DThe Federal Constitutional Court will not deal with whether the dismissal of a lawsuit against Greece for damages due to the rescheduling of Greek government bonds in February 2012 is unconstitutional. The 2nd chamber of the Second Senate did not accept a corresponding constitutional complaint for decision.
The contested judgment did not violate the complainants’ right to the legal judge. No submission to the Federal Constitutional Court was required, since the Federal Court of Justice (BGH) only applied the general rule of international law that a state is generally not subject to any foreign jurisdiction. The debt restructuring of government bonds as a sovereign measure by Greece was not subject to German jurisdiction.
At the time, Greece had made an exchange offer to bondholders, which was accepted by the majority but not by the complainants. Accordingly, the old bonds were to be exchanged for new bonds with a nominal value that was 53.5 percent lower, whereupon the custodian banks canceled the complainants’ previous bonds and booked the new bonds. The complainants had unsuccessfully brought an action for repayment of the original purchase value.
The BGH had been able to decide on the revision without having to clarify whether a general rule of international law was part of federal law and directly generated rights and obligations for the individual, because the rule of international law was that a state is generally not subject to any foreign jurisdiction , is generally recognized. The BGH only applied this. The BGH assumes that the issuance of government bonds as an act of private business belongs to the group of non-sovereign actions. The important thing here, however, is not that the debt restructuring measure was carried out by the Greek legislature and should therefore be classified as a sovereign act. This was constitutionally unobjectionable. Moreover, that view is correct.
A reduction in the nominal value of a bond by law is not available to a private market participant as an option to act and in any case belongs to the core area of sovereign action for bonds issued under the law of the issuing state and is therefore not subject to German jurisdiction.