## Facts

- Banco Popular del Peru, a Peruvian state-owned bank, borrowed from foreign lenders, including Mellon Bank, N.A., and later defaulted amid Peru’s debt crisis.
- Peru pursued sovereign debt restructuring supported by the Brady Plan framework, and Banco Popular became subject to Peruvian liquidation-related proceedings.
- In 1990, Mellon assigned a portion of Banco Popular’s debt to Pravin Banker Associates, Ltd., a secondary-market purchaser.
- Pravin declined to participate in Peru’s restructuring negotiations or Banco Popular’s local proceedings and instead sued Banco Popular and the Republic of Peru in the Southern District of New York to enforce payment.
- Defendants sought dismissal or a stay based on international comity, arguing enforcement would interfere with Peru’s restructuring efforts and U.S. foreign policy favoring successful debt workouts.
- The district court granted a limited six-month stay, then denied a renewed request for an indefinite stay or dismissal and entered summary judgment for Pravin.
- Defendants appealed, challenging both the denial of an indefinite stay and Pravin’s right to enforce the debt as assignee.

## Issues

1. Whether international comity warranted dismissal or an indefinite stay of a creditor’s U.S. action to enforce Peruvian sovereign/state-owned bank debt during Peru’s Brady Plan restructuring efforts and related local proceedings.
2. Whether contractual or other limitations rendered the assignment from Mellon to Pravin invalid, preventing Pravin from enforcing the debt in its own name.

## Decision

- The Second Circuit affirmed the judgment for Pravin.
- The court held that an indefinite stay or dismissal on comity grounds was improper because it would conflict with U.S. policy favoring both voluntary sovereign debt negotiations and the continued enforceability of valid debts.
- The court upheld the district court’s approach of allowing only a limited, temporary stay and rejecting open-ended deference that would effectively bar enforcement.
- The court rejected the assignment challenge, concluding the transfer to Pravin did not violate any express contractual restriction and conveyed enforceable rights.

## Legal Principles

- International comity is discretionary and requires balancing deference to foreign proceedings against U.S. public policy interests.
- U.S. policy supporting Brady Plan-style restructurings rests on voluntary creditor participation and does not, absent clear legal authority, suspend a creditor’s right to enforce valid contracts in U.S. courts.
- Courts may grant limited stays to accommodate foreign proceedings, but an indefinite stay that materially impairs enforcement can be inconsistent with U.S. policy and functionally impose a nonconsensual bankruptcy regime.
- An assignee of commercial debt may sue to enforce the obligation when the assignment does not contravene express contractual limitations.

## Conclusion

The Second Circuit refused to use international comity to indefinitely delay enforcement of Peruvian debt during Brady Plan negotiations, emphasizing that U.S. policy encourages voluntary restructuring while preserving creditors’ contract remedies, and it confirmed that Pravin could enforce the debt as a valid assignee.


Pravin Banker Assocs., Ltd. v. Banco Popular del Peru, 109 F.3d 850 (2d Cir. 1997)