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New York Contempt Ruling Against Argentina Is a Violation of International Law and an Affront to National Sovereignty

Sept. 30, 2014 (EIRNS)—In yet another display of arrogance, and at the urging of the vulture funds whom he defends, New York Federal Judge Thomas Griesa yesterday declared Argentina to be in contempt of court, for daring to exert its sovereignty and establish a mechanism for paying restructured bondholders outside of New York jurisdiction.

President Cristina Fernandez de Kirchner immediately charged that Griesa’s ruling is a gross violation of international law, the United Nations Charter, and the charter of the Organization of American States (OAS), warning that "the Argentine government reaffirms its decision to continue to exercise the defense of its national sovereignty." She also demanded that the U.S. government—Obama—take responsibility for the decisions of its judiciary, and finally respond to the suit Argentina filed against it at the International Court at The Hague earlier this year.

Griesa charged that Argentina’s Sovereign Payment of Foreign Debt Law, which authorizes it to carry out a new bond swap for restructured bondholders and establishes a unit of the state-run Banco de la Nacion as trustee, is illegal. “[Argentina] has been and is now taking steps in an attempt to evade critical parts of” U.S. court law, he asserted, complaining that “there’s a very concrete proposal that would clearly violate the injunction” stating that vulture funds have to be paid at the same time as restructured bondholders. Argentina shouldn’t have tried to remove Bank of New York-Mellon (BoNY) as trustee for the 2005 and 2010 debt restructurings, he blustered, or "make interest payments to holders of restructured bonds without recognizing" its obligations to pay the vultures.

In a toughly worded letter dated Sept. 29 to Secretary of State John Kerry, the Argentine Ambassador in Washington, Cecilia Nahon, warned that a declaration of contempt is a "legal absurdity," which contravenes all norms of international law and the principle of equality of among states. She rubs in Kerry’s face excerpts from earlier Amicus Curae briefs the U.S. government, itself, submitted on Argentina’s behalf against the vultures, which warn of the grave consequences for foreign relations of precisely the type of court rulings that Greisa has issued.

Even while Greisa raved, Argentina today deposited $161 million in an account in the newly-created Nacion Fideicomisos, BoNY’s replacement, to meet a Sept. 30 deadline for payment to restructured bondholders.