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Donnerstag, 12. April 2012

ICSID: The government suspects that the vulture funds are the owners of the sentences to be collected // ICSID Schiedssprüche sind verkäuflich / Argy erwägt Forderungen mit USD-Discount-Bonds nach NY-Law zu bezahlen

El Cronista
ICSID: The government suspects that the vulture funds are the owners of the sentences to be collected
Thursday, April 12, 2012
By Carlos Arbia
It refers to the sentences in the lawsuits of Azurix and CMS, which come to US$300 million. The government wants to pay then with bonds that were not issued in the last swap.
At the Economy Ministry and also inside the Foreign Ministry, there are suspicions that the companies Azurix and CMS, two U.S. companies that won lawsuits in the ICSID against Argentina, are no longer the owners of the debts that come to about US$300 million, as decided by the tribunal administered by the World Bank. The owners of those balances would be two vulture funds.
Faces with that concern, the main alternative being analyzed by the administration of Cristina Fernández is contemplating the possibility of paying those judgments with discount bonds under New York legislation that were not emitted in the debt swap.

There still remains about US$3.5 billion left to emit on those bonds.
In recent days, Argentine government sources asked the administration of Barack Obama to remit information around who is the true owner of the judgment won by Azurix before the ICSID, and if it’s seen as U.S. person or entity, as information has already circulated that the decision was sold on the secondary market, and that as such the water provider company no longer has the right to collect. “We still don’t have a response,” said the Executive Branch on the request made to U.S. authorities. And they said that “it’s not true, or at least it’s not known today, that an American company is the owner of that judgment.” In turn, it’s known that the company CMS sold its debt to the investment fund Blue Ridge.
This is in line with the position that the Foreign Ministry argues as well as the ambassador in Washington, Jorge Arguello, on how “the new owners of the Azurix and Blue Ridge judgments would never accept starting the process for collection on the sentences (in national courts), according to the rules of the arbitration entity and Argentine legislation.” Among the alternatives that are being studied to pay the debt are: a payment of discount bonds in dollars that still are left over from the payment of the restructuring of the debt (Swap I and II) and this would be the one which would have greatest acceptance on the part of the vulture funds. This is the position of the Treasury Solicitor, who wants the companies who won the cases after the economic emergency law came into effect in 2002 to follow the procedures to collect in local courtrooms. There is also the possibility that the government and the companies could come to an agreement outside the realm of ICSID.

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