MercoPress | 26 August 2021
Argentina sued before New York court for debts related to the expropriation of Aerolineas Argentinas
Argentina faces possible embargoes after holders of debt resulting from the expropriation of flag carrier Aerolineas Argentinas brought the case to a New York court on Wednesday for an amount of approximately US $ 320 million.
The investment fund Titan Consortium has taken legal steps after the expropriation of Aerolineas Argentinas in 2008 by the government of the then president Cristina Fernández de Kirchner.
The claimant obtained a favorable final judgment in 2019 at ICSID, the World Bank’s arbitral tribunal, which Argentina never paid.
A legal consultant quoted by Infobae explained that Argentina now has 60 days to respond to the lawsuit and it seems likely that embargo measures will be adopted against Argentine assets.
According to Infobae, Argentina could lose about US $ 9 billion before 2024 in unpaid international commitments before the United States Security Exchange Commission (SEC) derived from the case of Aerolineas Argentinas, the expropriation of YPF in 2012 and the payment of bonds with a GDP coupon associated to statistics manipulations by Argentina’s agency Indec, among other debts.
The case brought to the courts in New York on Wednesday has been going on for more than a decade. ICSID passed its first judgment against Argentina in 2017, at that time in favor of the Spanish group Marsans, considering that the government had not paid the corresponding amount for the flag carrier. ”The defendant (Argentina) violated Article IV of the treaty by failing to provide the plaintiffs with fair and equitable treatment of their investments,“ ICSID said, while reducing Marsans’ claim from US $ 1.6 billion to US $ 320 million.
”As of this year and before 2024, Argentina has international commitments for failures that it will surely lose for an amount greater than US $ 9 billion,” said an Infobae source.
The lawsuit was in the hands of Burford Capital, a London firm dedicated to buying cases of this sort. In 2018, with the favorable ruling worth US $ 320 million, Burford sold the dossier to Titan Consortium for US $ 107 million, but with a clause that if the courts finally ruled in favor of Argentina, the entire operation could be undone.
“Argentina’s request for annulment was rejected. Argentina will assume all the costs of the process and will pay the plaintiffs the sum of USD 1 million as representation costs ; and all other claims are rejected,” said the 2019 ruling of the World Bank’s arbitration tribunal.