Claims Washington violated Argentina’s sovereignty as a result of court decisions on debt
President Cristina Fernández de Kirchner’s administration yesterday asked the International Court of Justice, commonly known as the World Court, to take action against the United States over the country’s sovereign debt dispute, the latest move in its long-running dispute with holdout creditors.
But there is a major hurdle to the court hearing the case — the US must agree to its jurisdiction if the suit is to proceed.
“The Argentine Republic filed with the Registry of the International Court of Justice a document, against the United States of America, regarding a dispute concerning judicial decisions of the United States relating to the restructuring of the Argentine sovereign debt,” the court said yesterday in a statement.
The ICJ, the United Nations’ highest court for disputes between nations, said Argentina’s request had been “transmitted to the US government.” However, no action will be taken in the proceedings unless and until Washington accepts the court’s jurisdiction.
The US has recognized the court’s jurisdiction several times in the past, but it was not immediately clear if it would do so in Argentina’s case. Still, even if it fails to do so, Argentina’s lawyers highlighted the importance of formalizing an international complaint against another nation.
The Argentine government said that the US would have to offer an alternative solution if it does not recognize the court.
The decision to take the case to the court comes after Argentina’s default, caused by the failure to strike a deal with the holdouts, NML Capital, which is an affiliate of Elliott Management Corp, and Aurelius Capital Management. The government maintains it has not defaulted because it made a deposit for its interest payment on one of its bonds due in 2033. The funds are still frozen in a Bank of New York account as per US District Judge Thomas Griesa’s order.
Argentina said in its appeal to the court that the United States had “committed violations of Argentine sovereignty and immunities and other related violations as a result of judicial decisions adopted by US tribunals concerning the restructuring of the Argentine public debt,” the ICJ said.
“We issued a demand against the United States at the world court because of the actions of its judicial branch,” President Cristina Fernández de Kirchner said yesterday. “The court is the tribunal where countries go to when they have a dispute. It’s the way a democratic society has to resolve its conflicts.”
If the United States decides not to recognize the court’s jurisdiction, it will have to indicate an “alternative peaceful solution” to solve the conflict, according to a statement released by the office of Cabinet Chief Jorge Capitanich, which added the claim was filed due to a “violation” of Argentina’s “sovereignity.”
Any country “is responsible for the conduct of all its branches,” added the government.
Argentina’s sponsoring attorney in The Hague, Marcelo Kohen, who represented the government in previous claims at the world court, questioned Judge Griesa’s decisions that have favored the hedge funds the government calls vultures, saying “he doesn’t have jurisdiction over how the debt of a country should be paid.”
“Griesa and Pollack’s statements are totally unacceptable and show an absolute lack of impartiality. Even the US Executive branch considered Griesa’s interpretation of the pari passu clause as contrary to the usual one,” Kohen said in an interview with the radio programme Uno Nunca Sabe on AM750 radio. “Griesa’s decision completely lacks grounding on international law.”
The ICJ, the chief judicial organ of the United Nations, was established in 1946. The court is based at the Peace Palace in The Hague (Netherlands). It’s role is to settle legal disputes submitted to it by states according to international law, and to give advisory opinions on legal questions referred to it by duly authorized United Nations organs and agencies of the system.
The Frigate ARA Libertad dispute
This isn’t the first time Argentina has taken to an international tribunal in the debt conflict. Argentina’s navy’s sailing ship ARA Libertad, a training vessel, was detained in Ghana’s port of Tema at the request of US hedge fund NML Capital, which said that Argentina owed it US$300 million.
The government asked the International Tribunal for the Law of the Sea, another UN organ, to rule on the case, arguing that the United Nations maritime convention gives warships including unarmed training vessels immunity from civil claims when calling in foreign ports. Finally, the court ruled that Ghana should release the Libertad “immediately” and provide the assistance the crew needed to leave the port.
Ghana said the issue involved complex legal actions between bondholders and Argentina, and that the separation of powers meant Ghana’s Executive could not overrule the court decision. Meanwhile, the United States avoided involvement. The US Department of State’s deputy spokesman, Mark Toner, said that the US would not be involved in the detention of the frigate and assured it was “a matter between Argentina and Ghana.”