Bloomberg News

Ghana Ordered to Free Argentine Ship in Hedge Fund Dispute

December 15, 2012

A United Nations court said Ghana must release an Argentine naval ship seized in a dispute between the Latin American nation and a hedge fund that says it’s owed money over defaulted government bonds.

The International Tribunal for the Law of the Sea ordered the ARA Libertad freed after the African country detained it on Oct. 2, citing a court order obtained by NML Capital Ltd., which is run by billionaire hedge fund investor Paul Singer’s Elliott Management Corp. Argentina and Ghana must bear their own costs in the dispute, the Hamburg-based court said in a ruling today on its website.

NML and other investors who didn’t participate in debt swaps Argentina carried out after its 2001 default are seeking to recover the full value of the Argentine securities. About 93 percent of the defaulted bonds were restructured in 2005 and 2010, giving creditors about 30 cents on the dollar. NML is separately fighting in a U.S. court for repayment on the bonds.

The Latin American nation will “keep defending itself from the financial pirates,” Argentina’s Economy Minister Hernan Lorenzino said in comments posted after today’s decision on his Twitter account.

Argentina’s President Cristina Fernandez de Kirchner has vowed to never pay NML and other so-called holdouts that she dubs “vulture funds,” while continuing to service its restructured debt.

‘Contractual Obligations’

It’s “completely inappropriate” for the International Tribunal for the Law of the Sea to have gotten involved in the dispute over the defaulted bonds, NML said.

“Nothing changes the fact that Argentina has the capacity to honor its contractual obligations, but refuses to do so,” NML said in an e-mailed statement.

A U.S. appeals court delayed a ruling by Judge Thomas Griesa that had ordered Argentina to pay holdouts $1.3 billion by Dec. 15. The court will hear oral arguments for the case on Feb. 27, according to the Nov. 28 ruling.

Ghana’s Deputy Foreign Affairs Minister Chris Kpodo said today that his nation will “carefully consider” the UN tribunal’s ruling, according to an e-mailed statement.

To contact the reporters on this story: Jonathan J. Levin in Mexico City at jlevin20@bloomberg.net; Alex Cuadros in Sao Paulo at acuadros@bloomberg.net

To contact the editor responsible for this story: David Papadopoulos at papadopoulos@bloomberg.net


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