The Republic of Argentina v. NML Capital, Ltd.
Issues
Can a court order post-judgment discovery that would help enforce a judgment against a sovereign nation with respect to all assets, regardless of use or location, or is such discovery limited to assets located in the United States that fall under the Foreign Sovereign Immunities Act of 1976?
In December 2001, Argentina defaulted on its external debt payments. As a result, several bondholders agreed to debt restructurings with the country. However, NML Capital opted to file eleven different actions against Argentina in the Southern District of New York, with the district court ruling for NML in each action. Argentina has not satisfied any of the judgments, forcing NML to pursue Argentinian property located in the United States and abroad to try to attach and execute that property. NML subpoenaed two banks that are not parties to the litigation, seeking information about assets related to Argentina held at those banks. After the banks filed motions against the subpoenas, the district court ordered compliance with them and the Second Circuit affirmed, holding that the court directed the subpoenas at third-party banks seeking only discovery, not attachment or execution, and thus did not impinge on Argentina’s sovereignty. Argentina claims that these subpoenas violate long-standing protections of sovereign immunity. NML counters that the court ordered the subpoenas against non-litigating banks that fall outside sovereign immunity protection. The Supreme Court will now consider whether a court can compel discovery of all assets, regardless of location, of a sovereign state in a post-judgment proceeding that would help enforce the judgment against that state. This decision could affect diplomatic relations between the United States and countries that give reciprocal treatment of judicial decisions.
Questions as Framed for the Court by the Parties
Whether post-judgment discovery in aid of enforcing a judgment against a foreign state can be ordered with respect to all assets of a foreign state regardless of their location or use, as held in the Second Circuit, or is limited to assets located in the United States that are potentially subject to execution under the FSIA, as held by the Seventh, Fifth, and Ninth Circuits.
Facts
In December 2001, the Republic of Argentina defaulted on its external debt payments. See EM Ltd. v. Republic of Argentina, 695 F.3d 201, 203 (2nd Cir.
Edited by
- Lawrence Hurley, Reuters: U.S. Top Court Agrees to Hear Argentina Bank Subpoenas Case (Jan. 10, 2014).
- Greg Stohr, Bloomberg: Argentina Seeks U.S. Supreme Court Review in Debt Case (Feb. 18, 2014).
- Ted Folkman, Letters Blogatory: Case of the Day: NML Capital v. Argentina (Aug. 27, 2013).