Telam Argentina raised the first appeal to the U.S. Supreme Court

Telam

Argentina raised the first appeal to the U.S. Supreme Court

 

Tuesday, June 25, 2013

 

While awaiting the pronouncement of the Court of Appeals in New York in the case by the vulture funds, the government filed its first appeal before the U.S. Supreme Court against the ruling of that same court which upheld Judge Thomas Griesa.

 

So confirmed to Telam the Economy Ministry, led by Hernan Lorenzino, by indicating that “today Argentina filed the first extraordinary recourse (Writ of Certiorari) before the Supreme Court of the United States of New York.” (sic)

 

"It’s the first recourse against the sentence issued on October 26, 2012 (by the court), even as a definitive ruling awaits,” they said.

 

These moves by the economic team, which worked over the weekend on the brief, mark the guideline of the lawsuit that the country faces against the vulture funds, will extend the timing, at the margin of the ruling from the Court of Appeals in New York, which could come in the coming weeks.

 

Argentina stretched out the filing of the recourse until the deadline scheduled for today (June 24), “in a manner of not anticipating the arguments of a future appeal against the definitive ruling of the appellate court,” which still has not come, and that according to the result “could be subject to yet another subsequent recourse before the Supreme Court,” added the same sources.

 

Argentina’s filing exclusively attacked two aspects of the appellate court’s aspects that upheld decisions by Judge Griesa, and that in the judgment of the country, “affects federal questions that are unique and could be reviewed by the Supreme Court.”

 

In the first place, the brief argues that “if a Court violates the Federal Sovereign Immunities Law (FSIA), by executing monetary claims against a country through the granting of orders that restrict the use of its assets not only located in the U.S., but also outside its territory, (this) alleges going beyond the arena of execution that the law provides.”

 

The second point affirms that “if a Federal Court can issue injunctions previous to the sentence, forcing a country to pay a purely monetary claim, it therefore goes against Supreme Court jurisprudence in relation to traditional equitable remedies do not include orders designed to force payments agreed to contractually or the specific honoring of monetary obligations.”

 

With the brief filed today, “Argentina continues maximizing the legal resources that have allowed it to reject the attempts by the vultures to collect on one side, and on the other continue complying with the payments committee to by the swaps of 2005 and 2007,” emphasized the sources.

 

At his opportunity, Lorenzino showed, in this direction, that “we are turning to all legal instances that are necessary, including the U.S. Court, to comply with creditors that believed in and believe in Argentina.”

 

For Argentina, the appellate court’s decision “justifies being reviewed because it represents an unprecedented interference in the activities of a foreign state within its own territory that raises concerns about the foreign relations of the United States,” argues the brief in relation to the first argument.

 

The document adds that, by compromising the payments from the swap to pay the vulture funds, “the decision also puts at risk the process of voluntary sovereign debt restructuring which counts on the support both of the United States as well as the rest of the international financial community.”

 

The filing makes reference to the interventions that the U.S. government itself has already made during the process through New York federal attorneys.

 

In equal fashion it negative effect was mentioned that will be had on the financial market in New York as an international financial center, and the systemic effect on other debt restructurings.

 

Thus, in the face of the lawsuit in progress in Belgium from the European bondholders from the swap, who are seeking to halt the advance of Griesa’s ruling in that jurisdiction, the economic team confirmed to Telam that “it is advancing on the scenario of the responses that can be given from other courts outside the U.S.”

 

In another part of the brief, Argentina argues that “it’s difficult to conceive a question that irritates a foreign state and the international community more than the order of a court of a nation upon another nation on issues that go to the heart of the definition of sovereignty.”

 

It argues in another paragraph from the brief that a solution like Griesa’s “has no precedent in any court” and “contradicts” other rulings from different federal courts and the appellate court itself that issued it, around ‘pari passu’ (equal treatment to creditors).”

 

Lastly, in reference to the second argument made by Argentina, the text filed by Argentina questioned technical aspects “referring to the impossibility of the courts to grant remedies based on equity when adequate legal remedies exist.”

 

In this direction, the sources indicated that “the orders that, with the object of repairing a purely monetary harm, prohibit the Republic from effecting payments to a group of creditors, less that it make pro-rata payments to another group of creditors, violates every one of these fundamental precepts.”

 

 

La Nacion

The government appeals before the U.S. Supreme Court

 

Tuesday, June 25, 2013

 

by Martín Kanenguiser | LA NACION

 

Almost out of breath, the government appealed at the last minute last night before the U.S. Supreme Court the appellate ruling that condemned it to pay the holdouts US$1.333 billion from last October.  

 

The extraordinary recourse, like LA NACION reported yesterday, came on the last possible day to file a complaint on the decision that favored the vulture funds NML and Aurelius and 13 Argentine bondholders.

 

The Economy Ministry didn’t respond to numerous questions from LA NACION to know if they would take advantage of this opportunity or not.  More still, sources from a bank that works with the government said that the economic team “was not aware” of this key deadline for the defense of the country’s interests.

 

Last night, in silence, through the official news agency Telam, the government released the brief prepared by the law firm that represents the country in the U.S., Cleary, Gottlieb, Steen & Hamilton.

 

"It’s a first recourse against the sentence issued on October 26, 2012 (by the court), even as a definitive ruling is being awaited,” the agency said.

 

What the law firm did was to question the judgment of “pari passu” issued by the lower court Judge Thomas Griesa and the Court of Appeals, in both rulings released last year.  According to those courts, the government has to treat (and pay) in similar fashion the bondholders that entered the swaps to exit the default in 2005 and 2010.

 

Yesterday’s brief tries to focus the attention of the U.S. Supreme Court, which must study if it takes the case or not, on the possibility of a federal law having been violated; in this case, the one on sovereign immunity.  The argument is that, with preceding rulings, “monetary claims against a country, through the granting of orders that restrict the use of its assets located not only in the United States, but also outside its territory,” will be executed, which “goes beyond the scope of execution that is provided by the law” on immunity.

 

The sentences, it added, “also put at risk the process of voluntary sovereign debt restructuring, which counts on the support both of the United States as well as the rest of the international financial community,” as reflected in filings before different courts.  According to Telam, the request from Judge Griesa to pay the holdouts 100% in a lump sum “has no precedent in any court” of the United States.

 

Attorney Marcelo Etchebarne, partner at the firm of Cabanellas, Etchebarne, Kelly & Dell'Oro Maini, said to LA NACION: "I don’t believe that there is a federal case for the Supreme Court to take the case, because the Argentine argument that this is an attachment is mistaken and, as such, doesn’t violate federal law.”

 

In turn, the partner from the Garrido firm, Eugenio Bruno, said that “the court will take the case” and affirmed that “there are precedents of rulings in favor of the country, like in 1992, when it proved that the issuing of bonds is a commercial act and the one on the reserves of the Central Bank in 2012.”

 

The Court of Appeals still must decide how the government must pay the plaintiffs.

 

A case is decided today in Belgium

 

The commercial court of Brussels will decide today if it accepts the request of European bondholders so that the U.S. justice sentence expected to be against Argentina not affect its payments.  The request was made by a group of creditors that accepted the swaps of 2005 and 2010 to exit the default.

 

 

 

El Cronista

Lorenzino prepares a trip to Washington

 

Tuesday, June 25, 2013

 

The beginning of summer vacations in the United States refloated over this weekend the possibility that before the end of the month the ruling will be known from the Court of Appeals of New York about the decision of Judge Thomas Griesa from October 26 that ordered the Argentine government to pay the US$1.37 billion that the vulture funds demand.

 

For that motive it’s likely that part of the team that is led by Economy Minister Hernan Lorenzino will travel before the end of the month to Washington to closely follow the repercussions of the ruling.

 

Lorenzino and his aides have already been warned by the attorneys from the firm of Cleary, Gottlieb, Steen & Hamilton about the steps taken in the last week by the three judges of the appellate court that are in charge of the case, Republican Reena Raggi and Democrats Rosemary Pooler and Daniels Barrington Parker.

 

It is speculated that two of these judges rule against Argentina.  It has to be pointed out that the ruling is at the appeals level, with which in any case the final word remains before the U.S. Supreme Court.  Until now the White House was favorable to the country, as well as the IMF, which recently came out with a document against Griesa’s ruling.

 

Change of jurisdiction

 

At Economy they already began to evaluate alternatives to face this legal process and keep the service on the debt afoot.  Last night, they filed recourse before the Supreme Court of the United States that opens the door to a final appeal.  But officials didn’t fail to exploit, at the same time, alternatives to maintain payments.  The option that they are studying with more attention is the change of jurisdiction of bond payments to avoid attachments.

 

According to what ministry sources disclosed “this would oblige Argentina to change even intermediaries for payments on bonds, and would generate an unexplored but not impossible change of payment, to pay the debt.”

 

At Economy, they call this modality “a kind of technical modification of payment but not technical default.”  In particular because it is argued from the government that there is will and capacity to pay by the country to the bondholders.  “This alternative cannot be called a default, as some opposition voices from the market are planning to say,” they say at Economy, while admitting that there would be an alteration in the conditions of payment according to what is strictly established in the bond contracts.

 

Overall, at the Palacio de Hacienda they also admit that “there is a chance that one cannot rule out that after evaluating the swap proposal and arguments from Argentina explained in last February’s hearing and in documents sent to the court last March, the court would decide to also review the criteria of ‘pari passu’ to the creditors,” a situation that would benefit Argentina.