September 18, 2014
US top court agrees to hear Argentina bank subpoenas case
The US Supreme Court today agreed to consider a dispute over subpoenas in a case stemming from long-running litigation over Argentina's obligations to bond investors in the wake of its default on $100 billion in sovereign debt in 2002.
The court agreed to hear Argentina's appeal after an appeals court said a hedge fund could subpoena banks for information about the South American country's non-US assets.
The hedge fund, NML Capital, a holder of Argentine bonds, wants repayment in full in a fight that was prompted by Argentina's 2002 default. The repayment issue is the subject of high-profile litigation that could be headed to the high court in a separate case.
"Argentina is in open defiance of dozens of judgments of US courts to pay American investors what it owes," said Theodore B. Olson, a lawyer for NML. "It's time for Argentina to stop trying to evade its obligations and to follow the law."
In the matter the court acted upon today, the question is the narrower issue of whether NML could enforce subpoenas against Bank of America and Banco de la Nacion Argentina.
In August 2012, the 2nd US Circuit Court of Appeals in New York rejected Argentina's argument that some subpoenas should be quashed because it would infringe on its sovereign immunity. The Obama administration backed Argentina in the case.
NML, a unit of billionaire hedge fund manager Paul Singer's Elliott Management Corp, is one of several bondholders that rejected offers accepted by other investors to swap the defaulted debt for new paper at a steep discount. The other major player is Aurelius Capital Management.
In the higher-profile case, the same appeals court declined in November to reconsider an order requiring Argentina to pay $1.33 billion, ruling in favor of the bondholders. Argentina is now expected to seek a Supreme Court review in that case.
A decision in the subpoenas case is expected by the end of June.
The case is Argentina v. NML Capital Ltd, U.S. Supreme Court, 12-842.