Euro investors appeal ruling in Argentina debt case

[JURIST] Holders of Argentina's euro-denominated bonds filed a notice of appeal Friday of a US District Court for the Southern District of New York's [official website] ruling [opinion, PDF] barring the country from making interest payments on the notes until first paying $1.5 billion to a group of hedge funds. Also on Friday the court granted an expedited appeal [Reuters report] by Citibank [corporate website] and Argentina of another order from US District Judge Thomas Griesa that barred future payments to holders of certain US dollar-denominated restructured bonds, after the judge allowed the bank to make a one-time payment. Both appeals will be considered in oral arguments on September 18 by the US Circuit Court of Appeals for the 2nd Circuit [official website].

Argentina has faced a number of legal troubles regarding its foreign debt since its economic collapse in 2001. Earlier this month Argentina initiated legal proceedings [JURIST report] against the US in the International Court of Justice (ICJ) [official website] over US interference in the restructuring of Argentina's foreign debt. Argentina contends that the US violated its sovereignty and immunities as a result of judicial decisions adopted by US tribunals concerning the restructuring of the Argentine public debt. In June Argentina appealed to the US Supreme Court [official website], but the court refused to hear its appeals, denying certiorari [JURIST report] in two cases: Republic of Argentina v. NML Capital, Ltd. [docket; cert. petition, PDF] and Exchange Bondholder Group v. NML Capital, Ltd. [docket; cert. petition, PDF]. That same day the court ruled in a related case, also named Republic of Argentina v. NML Capital, Ltd. [SCOTUSblog backgrounder; JURIST report], that a hedge fund can subpoena banks for information about Argentina's non-US assets. In an opinion by Justice Antonin Scalia, the court held that no provision in the Foreign Sovereign Immunities Act (FSIA) [text, PDF] immunizes a foreign-sovereign judgment debtor from post-judgment discovery of information concerning its extraterritorial assets.

 

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