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New York judge's ruling sparks nationalist surge in Argentina

Stakes are high for Argentina's President Kirchner in a legal tug-of-war over full repayment of bonds from the country's 2002 default. Kirchner says her country is the victim of 'judicial colonialism.'

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The stakes couldn’t be higher for Argentine President Cristina Fernández de Kirchner as a legal tug-of-war with a $20 billion US hedge fund plays out in a New York case that has sent nationalist sentiment soaring in Argentina and raised concerns about the impact on future efforts to help debt-ridden countries recover.

NML Capital, part of American billionaire Paul Singer’s Elliott Management, is among a handful of creditors demanding full repayment of bonds that Argentina defaulted on in 2002, rather than the partial repayment to which most creditors agreed. They were buoyed by the Nov. 21 ruling of United States District Judge Thomas Griesa, who, arguing that Argentina must treat all its creditors equally, said the Southern Cone country must pay $1.33 billion to NML – as well as satisfy the demands of other creditors – by Dec. 15, or potentially face a second, “technical” default. 

A US court of appeals, however, issued a stay on Griesa’s order, sending it back to let the court figure out the mechanics by which it would force Argentina, a sovereign nation, to submit to local courts.

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