Ukraine is telling investors it must trim external debt by $15.3 billion. Its bonds have CACs but no aggregation, and a 50% vote is needed to bind holdouts. (Modification requires a quorum of at least 2/3 in aggregate principal amount; 75% of "persons voting" must approve the modification.) Faced with some determined investors, it will have to make holding out unattractive in order to gain approval on favorable terms, and this means dusting off its bonds to see what clauses work to its advantage.
It needs to be even more creative to deal with Russia, which (has an army and) controls 100% of its $3 billion bond issue. Assuming Ukraine is willing to play hardball, I discussed in an earlier post how it might have plausible defenses to enforcement of the debt. The doctrine of prevention--even impracticability (not normally available to debtors, but these are not normal circumstances)--comes to mind. That post elaborated on an argument made in an article by Mitu Gulati and Joseph Blocher. Mitu and Joseph make a second argument, which I want to address in some detail here. In a nutshell, the argument is that, if Russia tries to enforce the debt in English courts, Ukraine can use English procedural rules to demand sensitive information from Russia. As Joseph Cotterill elaborates over at FT Alphaville: "Ukraine could then bring Crimea, plus an examination of the inner workings of both the Putin regime and its relations with the Yanukovich government, into a legal defence..." The resulting embarrassment would be costly for Russia, and this cost, if material, would give an additional incentive for Russia to compromise. But I'm skeptical of the proposal.