[JURIST] The US Court of Appeals for the Second Circuit [official website] on Wednesday dismissed the Argentine government’s appeal of a contempt charge in an ongoing dispute over Argentina’s bond default in 2001. The contempt charge resulted after Buenos Aires refused to pay two US hedge funds and sought to sidestep a court order that forbids the government from paying only the bondholders it chooses. Judge Thomas Griesa of the US District Court for the Southern District of New York [official website] declared Argentina in contempt [JURIST report] last September. Griesa’s ruling blocked Buenos Aires from making payments to the majority of its bondholders unless it pays out in full to the hedge funds. He will decide next what sanctions to impose. The Second Circuit rejected the appeal as premature.

Last year Argentina signed into law [JURIST report] a bill to continue making payments on foreign-held bonds outside of US jurisdiction, circumventing the US court ruling [JURIST report] that prohibits Argentina from paying its bondholders until the dispute is resolved. In August Argentina initiated legal proceedings against the US in the International Court of Justice [official website] over US interference in the restructuring of Argentina’s foreign debt [JURIST report]. 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. That same day the court ruled in a related case 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 [text, PDF] immunizes a foreign-sovereign judgment debtor from post-judgment discovery of information concerning its extraterritorial assets.