A fair hearing for sovereign debt

A UK ruling on sovereign debt liabilities reminds us that US judges are not the world's judges

Last July, when United States federal judge Thomas Griesa ruled that Argentina had to repay in full the so-called vulture funds that had bought its sovereign debt at rockbottom prices, the country was forced into default, or "Griesafault". The decision reverberated far and wide, affecting bonds issued in a variety of jurisdictions, suggesting that US courts held sway over contracts executed in other countries.

Ever since, lawyers and economists have tried to untangle the befuddling implications of Griesa's decision. Does the authority of US courts really extend beyond America's borders?