CARMEL RICKARD: International paper chase
A bank’s inability to serve documents on the embassy of a defaulting state borrower has been concentrating minds in Qatar, Eritrea and the UK
It’s all very well to take the risk of extending a major loan to one of the world’s poorest countries, but what happens when that state simply ignores demands for repayment and refuses to accept notification of pending litigation? These questions have been concentrating minds at Qatar National Bank (QNB), the government of Eritrea and the UK courts.
In 2009, QNB loaned $30m to the government of Eritrea, with the state of Eritrea standing as guarantor of the loan. Just why QNB risked doing so is far from clear, particularly as the African country is regarded as one of the world’s most difficult places to do business.