US court lifts freeze on Argentina deposits

The government won the lifting of a freeze on $100 million of central bank deposits that was imposed to satisfy claims by two US investment funds arising from the country's massive 2002 debt default.

In lifting the freeze, the 2nd US Circuit Court of Appeals rejected an April 2010 ruling by US District Judge Thomas Griesa, who oversees US litigation over the $100 billion default.

Griesa had concluded that Argentina and its central bank, Banco Central de la Republica Argentina, should be treated the same way, as "alter egos," in determining whether to seize assets.

But writing for a three-judge appeals court panel, Judge Jose Cabranes said federal law shields property of a foreign central bank or monetary authority held for its own account "without regard to whether the bank or authority is independent from its parent state."

The case now returns to Griesa's court. The disputed funds have been frozen since 2006 and held at the US Federal Reserve Bank in New York.