Excerpted From: Kim Oosterlinck, Ugo Panizza, W. Mark C. Weidemaier and Mitu Gulati, A Debt of Dishonor, 102 Boston University Law Review 1247 (May, 2022) (178 Footnotes) (Full Document)


OosterlinckPanizzaWeidemaierGulatiIn 1825, Haiti, with a fleet of French gunboats offshore, agreed to pay France 150 million francs and to grant favorable customs treatment to French imports. In return, King Charles X granted “the full and complete independence of [the Haitian] Government,” although he did not explicitly recognize the new state itself. The payments from Haiti were intended to indemnify French plantation owners for properly, including enslaved persons, lost in the revolution that had won Haiti's independence in 1804. The immorality and injustice of demanding an indemnity from Haiti, which had already paid in blood for freedom from slavery and the colonial yoke, is clear today.

France has officially apologized and acknowledged a moral debt. The clear but unspoken implication, however, is that, if France has any obligations based on this history, they are moral rather than legal in nature. When asked in 2004, a spokesman for the French Foreign Ministry responded, “[T]his case has been closed since 1885.” But has the passage of time wiped the legal slate clean? Our goal in this Essay is to lay the historical and economic foundations for addressing that question and to offer some preliminary thoughts about its answer.

Broadly speaking, four significant barriers limit legal recourse for harms that occurred centuries ago. First, the wrongdoer may be long gone, along with those who suffered the direct harm. Second, the passage of time obscures facts, making it hard to determine whether there was a legal wrong under the laws of the time. Third, it is hard to quantify a harm done centuries in the past. Fourth, most legal systems have time limitations on claims that are often no more than a few years; two centuries is a long time.

In the case of the Haitian Independence Debt of 1825, the first limitation is of little significance. The primary parties in question--Haiti and France--are sovereign states. The law treats sovereigns (and, therefore, their obligations) as having infinite life. The fourth question--that of surmounting the statute of limitations or laches--will depend on the legal forum in which the claim is brought and the exceptions that forum permits to its time limitations, so we put it aside. We focus on the second and third limitations. First, we tell the story of the debt with more detail than is typical. Drawing on archival research and secondary sources, we trace the history from negotiations in the early nineteenth century to the assumption of the debt in 1825 and its eventual renegotiation in 1838. We end with Haiti's halting but ultimately successful efforts to pay the amount in full. The loan was controversial and its legality was questioned from the start, both in Haiti and in France. Because it was understood that Haiti could not pay without borrowing, we also describe the involvement of high-profile investment banks and politicians in placing Haitian loans in France. Second, we report a range of economically plausible estimates of the lasting harm to Haiti caused by the debt. These estimates fill a gap in the economic literature, which includes no readily available long series for Haiti's GDP and external debt. They suggest that the economic cost of the 1825 debt was large, likely a multiple of Haiti's 2018 GDP.

Armed with this historical and economic background, we conclude by offering preliminary thoughts on France's legal obligations to Haiti in the present day. To be clear about our intentions, we are not asking whether France owes reparations for past wrongs, where reparations means a backward-looking obligation to engage in corrective justice for reasons of fairness, morality, and equity--but not law. The question is whether there is a viable legal claim that could be brought before some tribunal today, under existing law, and we think the answer is a qualified “yes.” There are significant barriers, which, if litigated to conclusion, might result in a French victory. But the claim is more plausible than it might seem, and plausible claims have value.

[. . .]

These concluding thoughts largely come from our prior work, The Odious Haitian Independence Debt. The barrier is in getting before a tribunal. Leaving aside the possibility of suing French banks, the most likely forum for a dispute between Haiti and France would be the International Court of Justice. Unfortunately, jurisdiction before that Court requires French consent, which France seems unlikely to provide. Likewise, the doctrine of foreign sovereign immunity--a rule of customary international law--would likely bar litigation in courts in Haiti and other countries outside of France. Still, even the jurisdictional question may have solutions. For instance, trade agreements--including the Cotonou Agreement between the European Union and the Organization of African, Caribbean, and Pacific States--might provide both a substantive claim and recourse to an arbitration tribunal for resolving disputes.

In the course of working on this Essay, we spoke informally to a number of the lawyers who were involved in the 2004 attempt to bring such a claim when President Aristide was in office. Ultimately, no lawsuit or arbitration claim was filed; President Aristide was overthrown in a coup in 2004 and the subsequent government was not interested. But the lawyers had wrestled both with the jurisdiction question and that of finding a legal basis for a restitution claim under the laws in existence in 1825. Our sense from talking to them was that they had confidence that Haiti could force France to defend itself against claims arising out of the Haitian Independence Debt.

On the merits, Haiti's claim would be a long shot. But even long shots have value, including in scenarios involving disputes arising out of colonial obligations. One example involves the recent Chagos litigation. There, not one but three international tribunals ruled in favor of Mauritius against the United Kingdom (and, effectively, the United States) in its claims that some of its islands were improperly taken a half century ago--as quid pro quo for the United Kingdom giving Mauritius independence that the failure to return them amounts to incomplete decolonization. These rulings do not formally bind the United Kingdom, which has yet to return the territory, let alone pay compensation for the improper taking. But this and other recent cases represent small steps towards acknowledging, and providing some redress for, the harm associated with colonial rule.

These are complicated matters and we do not have good answers for them. But they are important. And, as our back of the envelope calculations show, they are not only important from an academic point of view but because of the lasting harm caused by the debt. Certainly any remedy designed to compensate for this harm could lead to large financial transfers to Haiti; a country in severe distress as of this writing. The same is true of a restitutionary remedy measured not by the harm to Haiti but by the benefit wrongfully obtained by France. More research is needed in order to bring clarity in this often forgotten episode in the history of sovereign debt.

Professor of Finance, Université Libre de Bruxelles; Research Fellow, Centre for Economic Policy Research.

Professor of International Economics, The Graduate Institute, Geneva; Vice President, Centre for Economic Policy Research.

Ralph M. Stockton, Jr. Distinguished Professor of Law, University of North Carolina at Chapel Hill School of Law.

Professor of Law, University of Virginia School of Law.