Argentina vs hedge funds: second chapter of appeal before the US Supreme Court
The Argentine government will appeal on Monday before the US Supreme Court for the second time against the hedge funds claim. The Supreme Court is the last judiciary step in the dispute.
The hedge funds demand the payment of Argentine debt in full, capital and interests, and Paul Singer, owner of the Elliot fund even asked for an embargo on all Argentine deposits in the US.
The US Supreme Court cited both parts for a presentation, after which the acceptance of the case between Argentina and hedge funds will be decided. The meeting will take place on April 21.
The Argentine government said that no information will be provided until after the formal presentation. Basically the path that begins on Monday will define the amount to be paid to hedge funds and the mechanism to implement those disbursements.
And while the Argentine government is hoping that the Supreme Court will take the case, it has made several significant decisions which indicate a change of attitude from their once arrogant position.
Argentina has agreed to pay those companies that have won cases in the World Bank's investments' dispute tribunal; has amended its inflation and GDP stats, following on the IMF recommendations; is negotiating repayment of the Paris Club debt; is trying to bring some sense to its highly subsidized economy beginning with a strong depreciation of the Argentine Peso, and on the political side, the government of President Cristina Fernandez apparently has dropped the memorandum of understanding reached with Iran for the questioning of Iranian officials allegedly involved in terrorist attacks in Buenos Aires.
According to Argentine diplomatic sources, very low ranking Foreign Affairs ministry officials attended the Islamic Revolution anniversary celebration earlier this month, and in March a top Israeli official is expected in Buenos Aires.
Furthermore the Congress has voted a bill which enables the government to reopen negotiations for the exchange of the 2001/02 defaulted bonds.
So far US federal Judge Thomas Griesa and a higher appeals tribunal have ruled in favor of the hedge funds (NML Capital Ltd; Elliot Management and Aurelius Capital Management) saying Argentina must pay 1.33 billion dollars in one single installment and cash.
However it is not clear what position the US government will adopt if come the case, as could happen, the Supreme Court on accepting Argentina's presentation calls on the Obama administration for an opinion.
Argentina basically argues that if finally it must comply with Judge Griesa's terms, the country could again fall into default because of the cataract of demands that would follow plus the fact that it could hinder the debt restructuring processes of other countries. Besides it would be most unfair with the majority of Argentine bond holders that have accepted the restructuring.
Argentina managed to restructure 93% of its defaulted debt in 2005 and 2010, but the hedge funds in the 7% pending have been battling for the full payment, including the seizure of Argentine assets worldwide as happened with the Navy's tall ship ARA Libertad impounded in Ghana for several months, before the UN Hamburg court on maritime issues overruled the action.
Argentina is represented in the case by New York's lawyers Cleary Gottlieb and the recent contracting of Paul Clement a former Attorney General from the George W Bush administration considered an expert in this sort of litigations.
http://en.mercopress.com/2014/02/17/argentina-vs-hedge-funds-second-chapter-of-appeal-before-the-us-supreme-court
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