Skip to comments.Elliott Management Loses Its Argentinian Warship On UN Orders (Argentina refuses to pay its debts)
Posted on 12/25/2012 9:19:41 AM PST by SeekAndFind
In the tug of war between Argentina and Paul Singer’s Elliott Capital Management, Argentina has scored a goal. A UN court has ordered Ghana to release the military warship that has been detained at Ghanaian shore for more than two months now. The UN International Tribunal for the Law of the Sea, located in Hamburg Germany, ruled that military vessels cannot be impounded in debt disputes. Ghana has been ordered to release the ship unconditionally, the court said, “Argentina should not [pay any] bail, bond or security”.
The ARA Libertad has been held at Tema harbor in Ghana since the 2nd of October this year. One of the holdout crediors of Argentine debt, NML Capital, a subsidiary of Elliott Capital Management, acquired a court order that allowed the impounding of Libertad for the payment of more than $300 million owed to NML. According to Bloomberg, the ship was worth only 1 percent of the outstanding payment that NML was looking for. The 300 men crew of the vessel left for home after the ship was detained.
Meanwhile Argentina continues to make up new names for the hedge funds who refuse to accept Argentine terms for debt payment, this time they are financial pirates. In a statement released on Twitter by Hernan Lorenzino, the Argentine economy minister said,
“Argentina will continue to defend itself from financial pirates. Vultures without the frigate and without the debt.”
Earlier in October when the three-mast ship was captured, Argentine President Cristina Kircher proclaimed, As long as Im president, you can take our frigate, but nobody is going to take the liberty, the sovereignty and dignity of this nation.
The government of Ghana said that they will carefully consider the court’s decision and act in a way that fulfills their country’s international responsibilities. NML Capital said in a statement, ”Nothing changes the fact that Argentina has the capacity to honor its contractual obligations, but refuses to do so.”
The UN court has ruled that the Libertad should leave Tema port by Dec 22. The vessel is set to reach Argentina on Jan 9.
From the Wall Street Journal:
U.S. hedge funds don’t normally seize naval ships, but in this case Elliott and the Ghanaian court are on solid ground. Elliott owns Argentine bonds on which Buenos Aires has been refusing to pay since its 2001 default. Elliott argues that a contract is a contract, and a federal court in New York agrees. Argentina had freely decided to issue its debt in U.S. capital markets and had agreed in its bond contracts to waive the sovereign immunity that would normally prevent lenders from seizing things like three-masted frigates.
To his credit, Judge Richard Adjei-Frimpong of Ghana’s commercial court noted that Argentina had specifically waived its immunity when borrowing the money and that under Ghanaian law the ship could therefore be attached by creditors with a valid U.S. judgment registered in Ghana. He ordered the ship held at port until Buenos Aires starts following the orders of the U.S. court.
But in its recent ruling, which ordered Ghana to release the ship by December 22, the Hamburg court claimed that international law requires immunity for the Argentine “warship,” as if Argentina never waived immunity and as if this is an actual warship. On Wednesday, Ghana released the vessel, and the ship set sail from the port of Tema for its trans-Atlantic voyage.
So here we have a case in which a small African nation admirably tried to adhere to the rule of law. Yet it was bullied by a global tribunal serving the ends of Argentina, which has brazenly violated the law in refusing to pay its debts and defying Ghana’s court order. The next time the Senate moves to ratify the Law of the Sea Treaty, Ghana should be exhibit A for opponents.
The Argentina of the “Botox Evita” Kirchner is falling to pieces with plenty of sharks in the water.
Rivals in the Peronist Party and the opposition circle as the country’s economy goes into the tank again like it did some ten years ago.
Last week there was looting of grocery stores in some citites.
It is worth noting that Argentina is getting 25% inflation as its economy crumbles...a combination that lots of people claim is backward.
RE: Scuttle it
Who’s going to do that? And what good is it to the debtor when scuttled?
Argentina owes Eliott Management about 600 million dollars in bonds. How much is that ship worth anyway?
How much is that ship worth anyway?
Looks like maybe 500,000 doubloons.
A doubloon is a Spanish gold coin which weighs approximately one ounce.
If Gold is about $1652.00 an ounce today, then 500,000 doubloons would be : $826,000,000.
That’s worth MORE than what Argentina owes Elliott Management in bonds.
a UN court?
Why is there such a thing?
to protect dictators?
I hope Ghana just flips the UN the bird.
This organization is getting too intrusive in the internal affairs of sovereign countries.
after the global EMP, this is all we’ll have left....did they also purchase some Danish 12-pounders perchance?