This report by Ann Pettifor is the first component of a three pillar approach to debt relief produced by the new economics foundation (nef)‘s Jubilee research program. It calls for the establishment of a fair and transparent arbitration procedure based on the concept enshrined in Chapter 9 of the US penal code for domestic government structures. This report argues that a government entity should not be forced to default on its obligations to its citizens in order to pay its debts. In the event that it is unable to meet its debt servicing, an independent arbitration process should determine a debt work-out that takes into account the interests of all parties, including the citizens. The practical functioning of this legal framework for the treatement of international sovereign debt is presented in three steps.