Tuesday, June 17, 2014


Sticking to the normal schedule during the World cup.  If you though I was going to move from the TV yesterday you had another think coming.  That will be the case for the next few weeks.  Trouble and Strife and I are just too much into it for that.

Which was a shame because in addition the the U. S. A.'s thrilling victory, yesterday was a joyous day.  The Supreme Court ruled to deny Certiorari to Argentina and left standing the ruling of the Second Circuit in the landmark case of EMT vs. Argentina.  It was a victory for the rights of contract and the rule of law.  Argentina, having agreed to be bound by the laws of the State of New York and having voluntarily submitted to the jurisdiction of the courts of that state and Federal Jurisdiction, agreed to a parri passu clause in their contracts by which the agreed to treat all holder of their debt equally.  The originally plaintiffs were upheld in their claim.

Regular reader might well remember that this result was predicted on these pages.  The decision turned on the Foreign Sovereign Immunities Act of 1976 and a goodly body of law on the doctrines of sovereign immunity and Act of State Doctrine for which one of the defining case in U.S. Jurisprudence is one simply known as Dunhill, involving the famous tobacconist and the Republic of Cuba.  Before he reached his present position, Dunhill was argued before the court by Mr. Justice Scalia as an Assistant Attorney General.  Argentina I suspect, had a very hard time explaining to Justice Scalia what the issues in their case were all about and it is not surprising that the decision was 7-1 with only Justice Ginsberg dissenting.  Ginsberg and Scalia being fast friends I guess she thought she could or should.  On the subjects of Foreign Immunity or the Act of State Doctrine, with Scalia around, it is wise to tread carefully.  On the sancticy of contract, few of the nine leave little wiggle room.

The court also reject the idea that the creditors, now armed with this decision, could not have subpoenas issue to track down Argentine assets in other jurisdictions which, whilst following logically, makes one wonder how to enforce such orders in a place like Brazil, but that is an issue for another time.  Suffice to say, however, that this non-action by the Court in refusing to grant Cert is no little thing.  It could be huge and it is this that we shall explore over the coming days.  In the mean time, the question is what will the Argies do?  That's easy: nothing until the end of the World Cup.  They may be crazy but they're not nuts.

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