U.S. Says Argentina Shouldn’t Face Elliott Subpoenas

Mar 7 2014 | 3:02am ET

Argentina’s banks should not have to respond to subpoenas issued by a hedge fund seeking payment on the country’s defaulted debt, the U.S. government said.

President Barack Obama’s administration this week filed an amicus curiae brief with the U.S. Supreme Court, which agreed in January to hear part of the long-running dispute between Argentina and Elliott Management. For the time being, the high court is not considering the central matter—whether Argentina will be forced to pay or not—although Argentina has appealed adverse lower-court rulings to it. Instead, it will determine whether Elliott can subpoena banks about the non-U.S. assets both of Argentina and of its top officials.

Argentina has argued that the subpoenas violate its sovereign immunity, a position now backed by the U.S. The Obama administration had asked the Supreme Court to consider the case in December.

The government’s position on the merits of the main case remains unclear. Last year, the administration declined to ask the court to hear Argentina’s appeal of lower-court rulings ordering it to pay Elliott and other holdouts from its 2002 default. That marked a change; previously, the administration had supported Argentina’s argument that, as a sovereign, it could not be forced to pay.

Argentina has vowed to never pay the holdouts. If the Supreme Court refuses to hear its appeal in the main case—which is seen as unlikely—or sides with Elliott, it would force Argentina to either violate that position or default on its restructured debt. 

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