9 Concluding Remarks
As this article has explored, there is some asymmetry pertaining to the Nordic Trustee’s right to sue and be sued in its own name on behalf of the bondholders. A party wishing to sue the bondholders cannot do so in the name of the Nordic Trustee, whereas the Nordic Trustee, on behalf of the bondholders, does have a right to sue both the issuer and third parties in close proximity to the issuer. On the other hand, the Norwegian courts are likely to allow the Nordic Trustee to be sued in its own name in respect of actions performed in its capacity as bond trustee.
Due to the current set-up of the Norwegian bond market, the Supreme Court’s reasoning and conclusions in the Thule Drilling cases were necessary to preserve this source of financing and investment in its present form. In general, the contractual framework ensures a fair balance of rights among the parties to the bond terms, as well as securing equality amongst the bondholders. The no-action clause and the authority of the bond trustee to sue on behalf of the bondholders are well‑known features of the Anglo-Saxon markets and accepted by the judicial systems in both England and the US.
The only substantial imbalance relates to the fact that it is significantly more difficult for the issuer to sue the bondholders than vice versa. Nonetheless, the need to sue the issuer is more pronounced than the need to sue the bondholders. Moreover, a right to sue the bondholders in the name of the Nordic Trustee would certainly result in the end of the Norwegian bond market, because the investors would regard this as an unacceptable risk. As such, this article argues that, in the interest of preserving the Norwegian bond market, the mentioned imbalance has to be accepted.
In the spirit of enhancing legal clarity and as a concluding remark, this article argues that the Nordic Trustee’s right to sue and be sued in its own name should to be subject to legal review and codification. With the rising number of issuers defaulting in the high yield bond market, it is unlikely that we have seen the end of cases concerning the Nordic Trustee’s right to sue and be sued in its own name.