Everyone's Got Supreme Court News - Argentina Edition
In a stunning upset of nobody's expectations, Argenitna is seeking Supreme Court review of the October 26, 2012 Second Circuit decision that it cannot pay its restructured debt unless it also pays the holdouts. Argentina has long promised to appeal all the way to the Supreme Court, and did so on the eve of the first deadline for such an appeal. No news here.
The most interesting thing about the filing is what it does not do: it does not ask the Court to overturn the Second Circuit's interpretation of Argentina's pari passu clause, only the injunction based on that interpretation. Argentina's lawyers must have made the tactical decision to focus the intervention on federal law issues of the sort SCOTUS tends to review--the Foreign Sovereign Immunities Act (FSIA)--and avoid distracting it with state law contract interpretation issues of the sort it does not. The result is that even if the Court agreed to review the case (unlikely), and Argentina prevailed (way unlikely), the interpretation of "rank payment obligations equally" as "pay ratably" would remain. This particular injunction against Argentina would fall away as impermissibly extraterritorial (restraining sovereign property outside the United States), but there would still be room to play around with the ratable payment remedy going forward, notably for other debtors, in other restructurings, maybe in other jurisdictions.
To be sure, Argentina will have another go at the Supreme Court after the Second Circuit decides the remainder of the case on the precise scope and effect of the remedy, but by then it could hardly reopen the question of what the clause means.
Otherwise, the petition reiterates the argument Argentina and the United States have made many times before, that telling Argentina to pay or not to pay someone in New York effectively constrains what it does with its treasury funds in Buenos Aires, and contravenes the express intention of FSIA to leave some judgments against sovereigns unenforced. No news here.