16 SDR, ECU, and Judgments
  • 1 0000000404811396https://isni.org/isni/0000000404811396International Monetary Fund

Abstract

The complexities of claims in a foreign currency and judgments based on such claims suggest the question whether judgments can be expressed in the SDR or the ECU when one of these units of account is the contractual unit of account and the means of payment for discharging the obligation giving rise to the claim. If judgments can be expressed in this way and are discharged in instruments or deposits denominated in one of these units as the contractual unit of account and payment, the problem of choosing the appropriate date of an exchange rate disappears. The judgment would be satisfied by the defendant’s transfer of instruments or deposits denominated in the SDR or the ECU, as the case might be, in an amount equivalent to the amount of the judgment. If, however, a plaintiff sought enforcement in currency of a judgment expressed in the SDR or the ECU, or the defendant sought to discharge the judgment debt in currency, the problem of the exchange rate would have to be faced, provided that the plaintiff was entitled to this form of enforcement or the defendant was entitled to discharge his obligation in this way. A plaintiff might see some advantage in obtaining a judgment expressed in the ECU if he were entitled to obtain settlement in the currency of any member state of the Community. The problem of exchange rate might be less contentious, however, in view of the relative stability in the exchange value of the unit of account.