Fresh off the US Supreme Court’s order list on Monday:
Needless to say this is not the pari passu case.
The Supreme Court is asking the US government’s opinion on a petition by Argentina against holdouts being granted “discovery” of information about the Republic’s assets abroad, as a means of getting paid in a separate case on other debt spinning out of the 2001 default.
But the request is a sign of the Supreme Court’s interest in taking the case further, and it has landed about the time when people are thinking of Argentina’s chances ofdrawing out taking the pari passu saga through to a cert petition, and similar interest by the Supreme Court. (This is the petition needed for the Supreme Court to take up the case.)
And it’s fun to compare the legal backgrounds.
Another case, another chunk of defaulted bonds ($2.5bn this time) held by NML and others, and also another set of third parties who have trundled into the firing line. Bank of America and Banco de la Nación Argentina, a state-owned lender, have both had holdouts come knocking for this info on Argentine assets going hither and thither through their hands.
(“We picked Bank of America because it is a very big bank and it was likely to be involved in the movement of funds, dollar funds through New York,” as NML’s lawyer once told Judge Griesa.)
Unlike the bonds in the pari passu saga, NML had already won judgment on this debt. That’s why both Judge Griesa in the District Court and then the Second Circuit approved an order for the discovery of assets. Those assets could be attached in enforcement of this judgment. Can they be dug out wherever they are in the world? That’s the question here.
Naturally, Argentina jumped up and down in its cert petition that this kind of discovery is “unprecedented” and “extraterritorial” — kind of similar to how it’sfulminated against the injunction on assets used in the pari passu case. But this time it could also point to direct disagreement between two US courts of appeals on the “anywhere in the world” question, especially about what the US Federal Sovereign Immunities Act allows.
The Second Circuit decided that just going out and getting information was OK with the FSIA. But the Seventh Circuit — in a really nuts case called Rubin v Islamic Republic of Iran — ruled that judgment creditors “must identify the specific property that is subject to attachment”. The Supreme Court eventually rejected Rubin’s own cert petition (after having got to the stage of asking the US government to weigh in.)
Maybe the split between circuits over something as central as the FSIA might entice the Supreme Court over this one. But what is really important to note is that Argentina likely can’t cite either feature if it now wants to keep the flame alive in the pari passu case.
No other court has really disagreed with the Second Circuit over its approval of ratable payment as a remedy for holdouts in the saga. (Argentina didn’t get en bancreview either, and there have been no star dissents from within the circuit in the case — or at least so far. We’re still waiting for a final order.) The FSIA parts of the pari passu case have also fallen by the wayside a bit at this point, and it doesn’t look like the final decision will turn on any big question of federal law.
That and it’s really, really hard to get a cert petition accepted…
Related link:
Les holdouts misérables – FT Alphaville
Les holdouts misérables – FT Alphaville
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