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why are Argentina's sovereign disputes ending up in a NY courtroom?
goes back to the days of El Proceso
[I]f you go back to the sordid history of the Argentine debt, that’s the other thing that’s really quite disturbing here. As of 1976, Argentina had a total foreign debt of $18 million, 17 percent of GDP. The military came in in ’76 with U.S. government support, established a junta. By 1983, the debt had soared to $48 billion… And no one has ever audited that debt. There’s a U.S. legal doctrine called odious debt which says that if you have a debt that’s contracted by a military dictatorship, it doesn’t necessarily have to be honoured. We invoked it with respect to Cuba in 1898. It had acquired a lot of loans from Spain, and nobody could account for where they were. But this odious debt doctrine had never been applied to Argentina.
Interestingly, the other thing is that this choice of jurisdiction was originally chosen by this military junta back in 1976. Martínez de Hoz, the finance minister at that point in time, a very conservative guy, decided that Argentina would waive its sovereign immunity for purposes of all this debt that it was beginning to ac ulate and allow the United States and the Southern District of New York to be the [centre] for all of these cases. So those two very fundamental changes made by, essentially, a military government, first of all blowing up the debt out of proportion, and then relocating the judiciary outside of Argentina, is very important for what we’re seeing.
