France Backs Argentina In Hedge Fund Fight

Jul 29 2013 | 9:40am ET

Argentina won't have the support of the U.S. or International Monetary Fund in its effort to convince the U.S. Supreme Court to hear its appeal on its decade-old debt default, but it can count on France.

France's government has submitted an amicus curiae brief to the court, urging it to consider Argentina's appeal of several lower-court defeats in its battle with hedge fund holdouts from its 2001 default. Two lower courts have ordered Argentina to pay the holdouts, led by Elliott Associates. Argentina has vowed never to do so, and could be forced to default on its exchanged debt if it holds to that position.

France submitted its brief on June 24, Argentina's state-run news agency said Friday.

The U.S. government, which has supported Argentina's position before the lower courts, has declined to weigh in with the Supreme Court as to whether Argentina's case should be heard. The IMF followed suit, saying it "would not be appropriate" to file an amicus brief without U.S. support.

If the Supreme Court refuses to hear the case, the lower-court decisions against Argentina would stand. Argentina and the holdouts are still waiting for a second decision from the U.S. Second Circuit Court of Appeals in Manhattan, which in October ordered the country to pay the holdouts, on Argentina's proposed settlement with those holdouts.

Argentina, which argues that the lower-court rulings violate its sovereign immunity, even though it issued the bonds in New York under U.S. law, has also argued that the lower-court rulings would severely hamper the international sovereign debt markets.

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