Can a U.S. Judge Hold the Government of Argentina in “Contempt”?

In the latest round in the never-ending battle between Argentina and its holdout bondholders, a U.S. court has found Argentina to be in “contempt” for trying to circumvent that US court’s orders. Argentina has been outraged by such an order, arguing that a  state cannot be held in “contempt” because it is an affront to its sovereign dignity (with Argentina’s president denouncing the U.S. judge as “senile“).   Indeed, the Argentine government on Monday sent a very interesting letter to U.S. Secretary of State John Kerry setting out why it believes it cannot be subject to a “contempt” order in a domestic U.S. court.

The Argentine Republic notes that it is completely absurd for plaintiffs to argue that a local judge can hold a foreign State “in contempt”. This position can only arise from ignorance or a distorted view of the fundamental rules of international law currently in force and the peaceful coexistence of global order.

The principles on which international coexistence rests are reflected in the Charter of the United Nations. One of these principles refers to sovereign equality of all States and is expressly embodied in Article 2(1) of that Charter. This is a fundamental principle when it comes to determining what a State can or cannot do in relation to other States.

When any branch of government of a State denies “equal” status to another State, it not only manifestly violates international law but it also risks setting a precedent for the commission of similar violations of international law to its own detriment.

I think that Argentina’s argument that contempt orders and other judicial sanctions against it are violations of international law (even thought it has consented to that domestic jurisdiction) can draw some support from the statements of the U.S. government itself (which is quoted extensively in the letter).  The problem for Argentina is that the U.S. judicial system has not agreed with the U.S. government’s views on many of these questions.  So US law is no help to Argentina here (for the most part). And the U.S. government has almost no legal mechanisms to change the district court’s actions here, so the letter is largely for public consumption.

The harder question is whether (as Argentina argues) there is a generally accepted rule of international law that a court cannot hold a sovereign in contempt where that sovereign has consented to the jurisdiction of that court.  This is a tricky question and one worth thinking about further. I hope to post on that when I have had more time to digest it.