The Brussels Commercial Tribunal will today tackle the lawsuit brought by the European bondholders who entered the Argentine debt swaps to halt any encroachment on their interests should the ruling passed by judge Thomas Griesa in the US be upheld, obliging financial entities to withhold their funds for the payment to the vulture funds.

El Cronista

A Belgian Court will rule on a bondholder lawsuit

 

Wednesday, June 26, 2013

 

The Brussels Commercial Tribunal will today tackle the lawsuit brought by the European bondholders who entered the Argentine debt swaps to halt any encroachment on their interests should the ruling passed by judge Thomas Griesa in the US be upheld, obliging financial entities to withhold their funds for the payment to the vulture funds.

 

At the start of the month, the Belgian Court took on a request for an expeditious trial for June 25, wherein the bondholders requested the Bank of New York Brussels, Euroclear and Euroclear Bank as intermediaries in the transactions not to withhold their funds for payment to the vulture funds.

 

The European bondholders are trying to get this court to oblige these entities, all under Belgian law, to honor their commitments in the payment process of the bonds issued by Argentina during the 2005 and 2010 swaps denominated in Euros.

 

They are hoping to avoid a legal ruling in the US bringing a halt to the normal procedures involved in the transfers to the European community.

 

These movements in the European Court were communicated by the self-same bondholders to the Court of Appeals of New York, which may soon rule on the lawsuit between Argentina and the vulture funds belonging to Paul Singer, NML, and Aurelius, for a total amount of 1.350 billion dollars.

 

In a letter addressed to Catherine O’Hagan Wolfe, Secretary of the New York Court of Appeals, the chambers representing the creditors, Latham & Watkins, maintained that the European Exchange bondholders were seeking to ward off an eventual clamp-down on payments to European bondholders.

 

European creditors were admitted as third parties affected by the US Court of Appeals in the lawsuit between Argentina and the vulture funds. In their presentation, made in New York and reiterated in their brief to the Belgian Court, they requested the Appeals Court, when deciding on whether to apply the pari passu order, to abstain from applying any order that touches on entities outside its jurisdiction, such as the Bank of New York branch in Brussels and Euroclear, both of which are taking  part in the payments process.

 

The European bondholders emphasized that the eventual application of Griesa’s ruling would violate the principle that no Court may oblige entities in other countries to refrain from acting in other nation states regulated by national law.-

 

They warned in their letter that if the effects of a ruling include the Bank of New York and Euroclear on Belgian territory, “this could contravene a definitive ruling by a Belgian Court concerning the establishment of an order pertaining to the accused under to Belgian law, violating a clearly established principle.”