A recent case concerning bonds sold by the International
Bank of Azerbaijan (IBA) has shown that, despite its critics,
the rule in Gibbs is still able to wield influence.
The century-old rule protects creditors’ rights
on cross-border deals.
"I do think the rule in Gibbs has its benefits," said Allen and Overy partner Jennifer Marshall,
a lawyer with expertise in restructuring and insolvency. "It
offers certainty to those who are drafting contracts because,
without that rule, if you had an English law document it could
be discharged or varied by compromise proceedings in another
While it has cushioned lenders active in the emerging
markets, it has drawn criticism due to the fact it can be
perceived as isolationist, acting against the interest of
The rule in Gibbs has helped uphold the rights of
holders of Eurobonds issued by the International Bank of
Azerbaijan;Experts feel Gibbs...