By: Staff Writer March 04, Colombo (LNW): Hamilton Reserve Bank (HRB) has opposed the Sri Lanka government’s appeal for a further stay of proceedings of the case against sovereign debt restructuring   for five months, submitting a joint status letter to the court in New York. In the Memorandum of Law in Support of Defendant’s Motion for a further stay of proceedings, the Government of Sri Lanka cited ongoing debt restructuring efforts that are yet to be completed, attributing the delay to the complexity of multi-party negotiations. The country asserted that additional time is necessary for finalising agreements with official creditors and reaching consensus with private commercial creditors. The Government was sued in July 2022 by HBR which sought full payment on over $ 250 million of Sri Lanka’s dollar bond that was due that month. HBR claimed it holds over 25% of the bonds, which would likely enable it to block any modification of the notes. However on Friday, Sri Lankan Government told the US Court, “Sri Lanka had hoped to implement restructuring agreements by the fourth quarter of 2023, but now expects to do so by the completion of the IMF’s second program review in the coming months. Recent progress, facilitated by the stay of proceedings in this case, has made that possible. For instance, finalising terms with official creditors sets a baseline for ensuring comparability of treatment, thus helping to frame discussions with private commercial creditors. Consistent with this, the ad hoc bondholder group previously noted the importance of Sri Lanka’s application of the principle of comparable treatment in respect of the debt relief requested and obtained from all their remaining official bilateral creditors. An additional five-month stay of proceedings would provide critical assistance to that process, whereas an immediate judgment for HRB would severely undermine it.” According to Sri Lanka, in the November 2023 decision, the Court found that the discretionary factors strongly favoured a six-month stay of proceedings and the same principles strongly favoured an additional five-month stay at this point in time. “In theory, HRB has an interest in seeking a prompt judgment. However, an additional five-month stay of proceedings would cause HRB minimal prejudice, at most. Even if HRB does not wish to participate in a voluntary restructuring, allowing that process to play out prior to a judgment ‘does nothing to vitiate Hamilton’s pre-existing contractual rights.’ And as the Court noted, any harm from delay can be remedied by prejudgment interest. Moreover, HRB’s claimed interest in expedition (even assuming it is a bona fide beneficial owner of the Bonds) should be heavily discounted. HRB purports to have purchased the Bonds well after it was clear that Sri Lanka was in dire straits.