Editor’s note: Chapter 5, with subchapters I through VI, of this title were enacted by PL 5-121. Chapters 1 through 4 were reserved. Title 58 itself was not given a title by PL 5-121, but the chapter title designated reflects the name of the Act.
SUBCHAPTER VI
Legal Matters
SECTIONS
§ 561. Choice of law.
§ 562. Liability of committee members, officers and employees.
§ 563. Pledge.
§ 564. Waiver of sovereign immunity.
The committee may choose to have all or a portion of the provisions of the Indenture and the Bonds governed by the law of a jurisdiction other than that of the FSM; PROVIDED that the power and authority of the FSM to issue the Bonds shall be construed under the laws of the FSM.
(1) No member of the committee, officer or employee of the committee, or any officer or employee of the FSM or any political subdivision thereof, including, without limitation, the FSM Attorney General or any person executing any Bonds shall be subject to any personal liability or accountability by reason of the issuance thereof. If, despite the foregoing, any action is brought against any member of the committee, any officer or employee of the committee, or any officer or employee of the FSM, then the FSM shall indemnify, hold harmless and defend such individual against any personal liability or accountability by reason of the issuance of any Bonds.
(2) Subsection (1) of this section shall not apply to any person covered by subsection (1) of this section who has engaged in fraud or other wanton misconduct relating to the issuance of any Bonds. However, where any person covered in subsection (1) of this section is alleged to have engaged in fraud or other wanton misconduct relating to the issuance of any Bonds, the FSM, upon written request by the person covered in subsection (1) of this section and directed to the FSM Office of the Attorney General, shall provide legal counsel and legal defense for such person at the expense of the FSM. If, upon final judgment, it is established that the person covered by subsection (1) of this section did engage in fraud or other wanton misconduct relating to the issuance of any Bonds, then such person shall reimburse the FSM for costs incurred by the FSM in providing legal counsel and legal defense. If the FSM fails, upon written request, to provide such person with legal counsel and legal defense at FSM expense then the FSM shall be liable to such person for any liability incurred by such person, the cost to such person of legal counsel and legal defense, and subsection (1) of this section shall apply fully to such person.
(3) Notwithstanding subsection (2) of this section, subsection (1) of this section shall not apply to any person covered by subsection (1) of this section in the case of a claim for judicial relief in a civil action against such person brought in the name of the Federated States of Micronesia.
Cross-reference: The statutory provisions on the President and the Executive are found in title 2 of this code. The statutory provisions on the FSM Supreme Court are found in title 4 of this code.
The FSM does hereby pledge to and agree with the holders of the Bonds and the provider of any Credit Enhancement that the FSM will not limit or alter the rights hereby vested in the holders of the Bonds, on and after the date of issuance of the Bonds, until the Bonds, together with interest and premium, if any, thereon, are fully met and discharged; PROVIDED that nothing herein contained shall preclude such limitation or alteration if and when adequate provision shall be made by law for the protection of the holders of the Bonds.
Only with respect to Pledged Funds, the FSM waives, for the benefit of the holders of the Bonds, the Trustee acting on their behalf, any agent or underwriter acting with respect to the Bonds, or the provider of any Credit Enhancement, its sovereign immunity from suit before the Federal court of the United States in the district in which the principal office of the Trustee is located in any action brought by the holders of the Bonds, the Trustee acting on their behalf, or such provider of Credit Enhancement arising out of the issuance and sale of the Bonds or performance under the Bonds or the Indenture. Except as expressly so waived, nothing in this chapter, including, but not limited to, sections 561 and 564 of this subchapter, is intended to be, nor shall be construed as a waiver, implicit or explicit, of the FSM’s sovereign immunity from suit in the courts of the United States of America. Nothing in this chapter shall be construed as a waiver, implicit or explicit, of the FSM’s sovereign immunity, or to permit any judgment or execution against the FSM with respect to any property other than Pledged Funds. In the event of conflict between this section and any provision of chapter 7 of title 6 of this code, this section shall prevail.