Argentina Gets U.S. Supreme Court Hearing in Bank Case

The U.S. Supreme Court will take up part of a multibillion-dollar fight over defaulted Argentine bonds, agreeing to review a court order requiring two banks to turn over information about the country’s assets.

Argentina’s appeal in the case is separate from a higher-profile lawsuit that the country says threatens to force a new default. In the case accepted today, Argentina is seeking to block a court order enforcing subpoenas against Bank of America Corp. and state-owned Banco de la Nacion Argentina.

NML Capital Ltd., an affiliate of billionaire Paul Singer’s Elliott Management Corp., wants the information as it tries to collect $1.6 billion in judgments it won in U.S. court cases. Billionaire Kenneth Dart’s EM Ltd. is pressing similar claims, though it isn’t involved in the Supreme Court case.

Argentina says the order, issued by a federal trial judge in Manhattan, improperly demands information about assets held by the banks in non-U.S. accounts.

The country says the U.S. Foreign Sovereign Immunities Act would bar the bondholders from collecting those overseas assets. As a result, the country argues, the law also precludes the bondholders from demanding information about that money.

The court order “targets property outside the United States that could not under any circumstances be the subject of execution under the FSIA,” Argentina argued.

Court Precedent

Argentina points to a 2010 Supreme Court ruling that said federal laws generally don’t apply overseas.

NML contends that the FSIA doesn’t affect the traditional power of federal trial judges to order entities to provide information that is relevant to a legal claim.

“A well-functioning market for sovereign debt depends on investors’ confidence that they will be able to enforce loan agreements with foreign countries -- and to collect on any judgment obtained,” NML argued.

The New York-based 2nd U.S. Circuit Court of Appeals ruled in favor of NML.

The Supreme Court acted after U.S. Solicitor General Donald Verrilli joined Argentina in urging the justices to hear the case. Verrilli said in court papers that the subpoenas “are improper insofar as they are directed to assets located outside the United States.”

In a separate case, Argentina is fighting a court order that bars the country from making payments on restructured debt unless it pays holders of the defaulted bonds. Argentina has until February to file a Supreme Court appeal in that case.

The case accepted today is 12-842.

To contact the reporter on this story: Greg Stohr in Washington at

To contact the editor responsible for this story: Patrick Oster at

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