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Opinion: Lenders, beware — a Kenyan court case may invalidate 'odious debts'

Loans made outside normal parliamentary channels and held offshore may soon find themselves less likely to be repaid

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In international law and finance, few doctrines challenge the legitimacy of dictators, autocrats and unaccountable rulers more directly than the “doctrine of odious debt.” First formalized by Russian legal scholar Alexander Nahum Sack in 1927, the doctrine holds that debts incurred by despotic or unrepresentative regimes should not bind their country’s citizenry. These are not legitimate obligations of the state, the theory goes, but personal liabilities of the rulers who incurred them without the consent of the people and not for their benefit, often with the complicity of creditors.

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