Earlier today the Superior Court of Judicature granted NML Capital Limited, a commercial creditor of the Republic of Argentina, an injunction and interim preservation order against the sailing ship ARA Libertad, which arrived Monday at Tema port.
The order requires the Libertad to remain at Tema, pending hearing on the enforcement in Ghana of judgments against Argentina issued by the United States District Court for the Southern District of New York, supported by similar judgments in London. Argentina may obtain release of the ship however, by posting a bond with the High Court in Accra.
Argentina’s status as an international scofflaw has been well documented. International creditors have won more than 100 court judgments against the Argentine government, but Argentina has refused to honor any of these judgments and has repudiated bonds which it issued in good faith. A New York judge has characterized Argentina’s refusal to pay its debts as an “absolute steadfast refusal to honor its lawful debts,” and that the government is “defying deliberately, intentionally, and continually.”
Argentina’s egregious treatment of creditors and debts also extends to international financial institutions. It has repeatedly ignored judgments issued by the World Bank’s arbitral body, the International Centre for the Settlement of Investment Disputes (ICSID). In May 2012, the Spanish oil company Repsol filed the 50th ICSID case against Argentina. The claim is for $10 billion compensation after Argentina nationalized Repsol’s energy company YPF. Among G-20 countries, Argentina accounts for 84% of pending cases at ICSID. It has consistently disregarded the rule of law.
More than a decade after Argentina committed, at that time, the largest sovereign default in history, prosperity quickly returned due to expanded soya production and strong agricultural commodity prices. The country has since accumulated more than US$45 billion in foreign exchange reserves, yet has failed to resolve its overdue debts to thousands of bondholders and lenders.
Argentina’s national income per capita is more than six times Ghana’s, and its foreign exchange reserves are eight times larger. Also in stark contrast, while Ghana has attained an exemplary ranking among nations of Africa on the Center for Financial Stability’s Rule of Law Index, Argentina ranks near the bottom, because of its ongoing defiance of international covenants.
This legal action in Ghana is among hundreds of court actions brought by private creditors around the world seeking to recover their loans. Argentina waived its sovereign immunity to obtain such loans, but has chosen to engage in an international-cat-and-mouse game, by hiding its assets in Swiss banks and other relatively inaccessible locations. Although a sovereign government is involved, such enforcement in Ghana of judgments from courts in the United States and England is commercial and routine. In fact, a 2004 article in La Nación, the Argentine daily newspaper, reported that the country deliberately avoided the ports of creditor countries for fear of attachment of the Libertad.
The Libertad is a tall ship used for training seamen from Argentina and other countries. It was launched in 1956 and has an overall length of nearly 104 meters. Tema is one of more than a dozen ports where Libertad plans to calling for training and supplies in its six-month circumnavigation of the Atlantic Ocean.
NML is a subsidiary of Elliott Management, a New York based investment fund engaged in the management of investments on behalf of pension funds, university endowments and other institutions and individuals.
