War ship saga : Argentina still owes hedge funds $15m in damages

If there's anything we've learned about the over $1.3 billion debt saga between a group of hedge funds and Argentina it's that just when you think something is over...

There could always be more. And so it is with a tiny incident that occurred in 2012. Ghanaian legal documents reviewed by Argentine paper Clarin's Ana Baron say that, La Fragata Libertad, a war vessel impounded in Ghana at that time "escaped" before it was legally released.

Additionally, says the Ghanaian Court, the Argentine government owes $15 million to the group of hedge funds that had the boat impounded in the first place. Yes, this is completely bizarre so let's back track.

In the fall of 2012, the group of hedge funds, led by Elliott Management's Paul Singer, obtained a Court order from a Judge in Ghana confirming that Argentina did indeed owe them over a billion worth of unpaid sovereign debt.

And as such, said the Court, La Fragata Libertad — then docked in a Ghanaian harbor — could be impounded where it sat and used as collateral.

This is all part of a saga going back to 2001. That's when Singer and company bought Argentine sovereign bonds for pennies on the dollar after the country defaulted on its debt. While most investors in that debt took haircuts in 2005 and 2010, Singer held fast asking for 100 cents on the dollar for the bonds.

Argentina refused — insisting that they should be paid less like everyone else. An epic legal battle ensued — one which ended this summer with Argentina losing and going into default as it continued to refuse to pay.

Before all that and outside the Court room, though, Singer and company chased Argentina's assets all over the world, arguing that they had the right to discover anything the country owned that could be used as payment for its debt.

That's how the hedge funds found La Libertad and got it impounded. It stayed in Ghana for months, manned by a skeleton crew that sometimes found itself in aggressive spats with Ghanaian naval officials.

The boat went back home when the International Maritime Court of the Sea ordered its release. The problem is, Baron reports, that Ghana did not ratify the IMCS's order until months later. That means it wasn't actually legal in Ghana.

Which also means La Libertad high-tailed in back to Argentina illegally. "As these Court proceedings remained pending, La Libertad, the Argentine war ship, left Ghana in violation of the Supreme Court," said the Ghanaian Court order.

The Court also said that Argentina still owed the hedge funds $15 million in damages.