ARGENTINA IS SEEKING to sue the United States at the world court over US court rulings that last week forced the country into a default.
The International Court of Justice, commonly known as the world court, said in a statement today it has received a request from Argentina to take on the case. There is a major hurdle though: the US must agree to grant the international court jurisdiction if the suit is to proceed.
Sovereignty
In a statement, the Hague, Netherlands-based court said Argentina’s filing asserted that US court rulings amount to “violations of Argentine sovereignty.”
The dispute stems from a US court’s order for Argentina to pay in full a group of bondholders led by a New York hedge fund who refused to accept lower payments for restructured bonds following the country’s default in 2001.
The US court, in a decision upheld by the Supreme Court, ordered Argentina to pay the holdout investors about $1.5 billion. It blocked the country from making $539 million in interest payments to bondholders who did accept the restructuring, leading the country into a new default on July 30.
Argentine officials have repeatedly argued that the US court decisions violate its sovereignty.
Default
The default, the country’s second in 13 years, adds increased uncertainty to an economy already in recession.
The International Court of Justice is the United Nations’ court for resolving disputes between nations. In its statement today, it said it has passed on Argentina’s filing to the US government.
It said that no action will be taken in the proceedings “unless and until” the U.S. agrees to grant the UN court jurisdiction.
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