The US Court of Appeals for the Second Circuit [official website] on Wednesday stayed a lower court ruling that would have forced Argentina to pay $1.3 billion to one of its creditors, the investment fund NML Capital Ltd. [corporate website]. The Second Circuit blocked a decision by the US District Court for the Southern District of New York [official website] that ordered Argentina's government to pay the $1.3 billion into an escrow account [Bloomberg report] by December 15. Last week Argentina appealed the district court's decision [JURIST report], saying that it was unfair. Argentine President Cristina Fernandez de Kirchner [official website, in Spanish] called the district court's ruling "judicial colonialism" [WSJ report] and refused to pay the debt to NML Capital. The Second Circuit has scheduled oral arguments for February 27.
In October the Second Circuit ruled [JURIST report] that Argentina must pay $1.33 billion to bondholders when it repays its debts stemming from an economic collapse in 2001. The Second Circuit affirmed a district court ruling that Argentina breached a promise when it prioritized paying holders of its restructured debt over the bondholders who held its defaulted debt. In August the Second Circuit rejected [JURIST report] Argentina's attempt to prevent bondholders from acquiring bank documents regarding the country's assets outside US territory, declaring that sovereign immunity was not an acceptable defense in this case. In September 2011 the US District Court for the Southern District of New York ruled [JURIST report] that Argentina had to comply with subpoenas requested by NML Capital Ltd. for the collection of five money judgments totaling about $1.6 billion.