Why did Donegal sue?
It’s completely legal, but profoundly unjust – here’s why Donegal International took Zambia to court. In the 1970s, Zambia borrowed money from wealthier governments, including $15 million from Romania in 1979 to buy agricultural machinery and vehicles. By the 1990s, because of crushing poverty, it was unable to repay these debts and became eligible for the process to qualify for debt relief. It began negotiating with its creditors about partial payment of old, bad debts. In 1999, as Zambia was trying to negotiate clearing the debt they owed to Romania, Donegal International swooped in and bought up the debt – then valued at around $30 million with accrued interest – for a knockdown price of $3.3 million. Now they have sued Zambia for the full amount of the debt. But that’s not all. They also sued for interest and costs, demanding a staggering $55 million in total!
