This chapter critically analyses the issue of sovereign default and its legal and factual consequences, as well as the process that makes it possible to restore the capacity of a state to enter into financial relations. In this context, it is argued that sui generis recognition constitutes one of the elements of this process. This sui generis recognition does not concern the recognition of a state (as the state still exists), but rather relates to recognition of certain of its sovereign prerogatives. Due to the peculiarities of this form of recognition it is referred to as a “hybrid recognition”. Its hybridity is connected with the fact that such recognition combines two different legal regimes (i.e. public and private) and is expressed in the context of a process that mixes different levels of normativity.