[JURIST] The Chamber of Deputies [official website, in Spanish] of the Argentine National Congress on Thursday approved a bill that was signed into law [press release, in Spanish] later that day by President Cristina Fernandez [official website, in Spanish] to continue making payments on foreign-held bonds outside of US jurisdiction. The law circumvents a US court ruling prohibiting Argentina from paying bond-holders [JURIST report] until Argentina resolves its legal dispute with a group of New York hedge funds over unpaid debt from Argentina’s 2002 default. The new law allows creditors to exchange their USD $29 billion in foreign-held bonds for new bonds [Reuters report], encouraging investors to move their Argentine debt from the US to Argentina or France.
Argentina has faced a number of legal troubles regarding its foreign debt since its economic collapse in 2001. 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: 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 [text, PDF] immunizes a foreign-sovereign judgment debtor from post-judgment discovery of information concerning its extraterritorial assets.