POSTED: 04:34 a.m. HST, Apr 21, 2014
WASHINGTON >> The U.S. Supreme Court is hearing arguments Monday in Argentina's decade-long battle with holders of its defaulted bonds.
The question now before the court is relatively narrow, focusing on whether a sovereign nation can be forced to reveal its assets around the world so plaintiffs can collect on U.S. court judgments.
But the justices will be watched closely for clues to how they might rule on a more critical case involving the same players: the Argentine government's appeal of a $1.4 billion judgment that it says could destroy the country's economy and also damage the U.S. financial system.
So far, the courts have backed NML Capital Ltd., which won an unprecedented judgment that would block Argentina's payments to many other bondholders unless it pays cash first to the plaintiffs.
But Argentina has many supporters in this particular case, including the Obama administration, which argued in a brief that U.S. courts cannot compel sovereign nations to reveal assets kept outside of the United States. If allowed to stand, the lower court ruling would violate the U.S. Foreign Sovereign Immunity Act and could complicate U.S. foreign policy and endanger U.S. interests overseas, its brief argued.