DALLAS (CN) - Argentina claims in court that subpoenas from a hedge fund about the country's massive bond default dating back to 2001 are part of an "ongoing campaign of harassment."
Argentina filed a motion to quash in Federal Court.
Cyprus-based NML Capital Ltd. is trying to depose nonparty oil companies Apache Oil Corp. and EOG Resources, both of Houston.
Argentina claims the subpoenas are part of a larger "fishing expedition" by which NML is trying to evade the Foreign Sovereign Immunities Act's execution limits, by "demanding extensive, burdensome discovery" about Argentina.
"However, the FSIA, which provides the sole basis for U.S. courts to exercise jurisdiction over foreign states and their property, clearly applies here and does not permit the type of overbroad discovery requested by NML," the motion states. "Indeed, even apart from the FSIA, NML's subpoenas are improper under Federal Rule 26's standard requirements that discovery must not impose an undue burden and must be limited to matters that are relevant."
Argentina says the hedge fund bought deeply discounted sovereign debt on the secondary market during the country's financial crisis that began in 2001, and has been stifled in most of its collection efforts due to the broad immunities for sovereignty property under the FSIA.
Argentina says it was forced to defer interest and principal payments on $80 billion in debt.
Calling NML a "vulture fund," Argentina claims creditor NML took advantage of the absence of sovereign bankruptcy protection by suing for face value of the debt and aggressively trying to execute on the resulting judgments.
"In accordance with its business strategy, NML refused to participate in the Republic's 2005 and 2010 voluntary, global debt exchange offers, which together resulted in the successful restructuring of approximately 92 percent of the Republic's non-performing debt," the motion states.
"Instead, NML has aggressively pursued attachment and execution efforts against the Republic (often involving novel - and incorrect - legal theories), the vast majority of which have been rejected by the courts of the United States due to the immunities afforded sovereigns and their property under the FSIA." (Parentheses in complaint.)
Argentina accuses NML of suing to disrupt the 2005 exchange offer, to seize its diplomatic and military property in the District of Columbia and Maryland, to seize social security funds managed by third-party fund administrators, to halt the launch of a scientific satellite by the Argentine space agency and to attach the reserves of the Argentine central bank, among other things.
Argentina is represented by Debra McComas, with Haynes Boone of Dallas.
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