31 Jul Argentina Defaults (Again) and Issues a Frivolous Threat to Sue the U.S. For Causing the Default
According to Standard & Poor’s, Argentina has defaulted on at least some of its sovereign bonds, after last minute negotiations failed to reach a deal with its holdout bondholders, who had won a series of victories in U.S. court. Although there are reports that some U.S. banks representing the rest of the bondholders are exploring ways to buy out the holdout bondholders on Argentina’s behalf (no doubt by having Argentina borrow even more money to do so), Argentina seems ready to go to the mattresses, so to speak. Or, at least in this case, to take the U.S. to the ICJ:
[Argentina Cabinet Chief] Capitanich said Argentina would denounce the “vulture funds” before the International Court of Justice at The Hague and the United Nations General Assembly.
Argentina has been going all out to try to convince other countries and the international community to support its cause including full page ads in major US newspapers, a diplomatic offensive at the recent Organization of American States meeting, and finally this threat to sue the U.S. government for failing to reign in its courts in the holdout creditor litigation against Argentina.
As far as the ICJ goes, this is a pretty idle threat. The ICJ would not have compulsory jurisdiction over the U.S. in this matter, so at best the ICJ would be asked to issue an advisory opinion. But even in that case, what exactly is Argentina’s claim? That the U.S. has violated international law by blocking some of Argentina’s debt payments? What international law obligation is being violated? Until someone explains what the legal theory is, I will classify this part of Argentina’s campaign to justify its latest default as just more hot air.