Argentina sues US at top UN court over debt

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Argentina's President Cristina Fernandez Kirchner
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Argentina on Thursday sought to haul the United States before the UN’s highest court, accusing Washington of breaching its sovereignty after a United States judge blocked the country from servicing its restructured debt.

“The Argentine Republic filed today… a document, dated 7 August 2014 against the United States of America,” the Hague-based International Court of Justice (ICJ) said in a statement.

The dispute concerned “judicial decisions of the United States relating to the restructuring of the Argentine sovereign debt,” the court added.

However, “no action will be taken in the proceedings unless and until the United States of America consents to the Court’s jurisdiction in the case,” the ICJ said.

Buenos Aires on Wednesday called on the US to rein in a judge who granted two hedge funds a ruling blocking the South American country from servicing its restructured debt.

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It wants the US government to intervene in an ongoing court battle which has seen New York District Judge Thomas Griesa bar Buenos Aires from making payments to bondholders who accepted a 70-per cent write-down without also paying the hedge funds the full $1.3 billion it owes them.

Argentina accuses the US of having “committed violations of Argentine sovereignty and immunities and other related violations as a result of judicial decisions adopted by US tribunals concerning the restructuring of the Argentine public debt,” the ICJ said.

Argentina went into its second default in 13 years on July 30 when the grace period expired on a payment due to creditors who had agreed to restructure the country’s debt after its 2001 economic crisis.

The two US hedge funds, which Argentina calls “vulture funds,” refuse to accept less than the full value of their bonds.

But Argentina says paying them in full could trigger legal claims for equal treatment by the 92 per cent of creditors who agreed to a write-down, putting the recession-hit country on the hook for up to $100 billion.