US court ruling on Argentine debt violates int'l law: Buenos Aires

  • Economy
  • Tuesday, 30 Sep 2014

A grafitti depicting US Judge Thomas Griesa and the corporate vultures behind bars in Beunos Aires. Judge Griesa, who recently held that Argentina was in contempt – and presumably liable to be locked up until sufficiently penitent – is not the most popular man in Argentina today – AFP Photo.

BUENOS AIRES: Argentina on Monday slammed as illegal a US judge's ruling finding it in contempt of court on its debt payments.

"The ruling by Judge Thomas Griesa saying that the Argentine Republic is in contempt of court, violates international law, the UN Charter, and the OAS charter," a foreign ministry statement said, referring to the Organisation of American States.

In New York, Griesa had, earlier on Monday, said Buenos Aires acted illegally to avoid his orders to first pay off hedge funds that sued the country for full payment on their bonds.

Earlier this year, Griesa banned Argentina from making payments on restructured bonds – debt from its 2001 default – without first paying the hedge funds, NML Capital and Aurelius Capital Management.

The two firms hold some US$1.3bil’s worth of Argentine bonds scooped up at huge discounts after the default. They refused to take part in the restructuring with the majority of creditors, and instead have sought full payment on the bonds.

Argentina, however, has refused to pay what it slams as "vulture funds," and Griesa's effective block on paying the other creditors forced the country into a new default at the end of July.

Since then, the government has passed new domestic legislation aimed at transferring its bond contracts away from US jurisdiction to Argentine jurisdiction, so that they could make the payments.

Buenos Aires has since then announced its plan to fire the official trustee for most of its debt payments, Bank of New York Mellon, which Griesa had ordered not to transfer any funds to the country's creditors. – AFP

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