BY JONATHAN H. ADLER
Monday the Supreme Court hears oral argument in Republic of Argentina v. NML Capital, in which Argentina seeks to avoid a lower court judgment enforcing the terms of contracts Argentina willingly entered.
As I discussed here and here, Argentina defaulted on its debt obligations in 2001. Most of the outstanding debt was restructured, but a few creditors refused to go along. They filed a lawsuit, seeking to enforce the terms upon which Argentina had originally issued its bonds, eventually obtaining an injunction that could effectively force Argentina to pay up by enjoining the payment of restructured debt without also making payments to holders of unrestructured debt. Argentina is now challenging a ruling by the U.S. Court of Appeals for the Second Circuit upholding the injunction. Of note, the solicitor general is supporting Argentina, which has also suggested it might not comply should its legal efforts fail.