Republic of Argentina v. NML Capital, Ltd.
Republic of Argentina v. NML Capital, Ltd., 573 U.S. 134 (2014), is a U.S. Supreme Court opinion regarding foreign sovereign immunity. After defaulting on its debt and losing a federal collection action, Argentina claimed that its foreign assets were immune from discovery. The Court found that no such immunity existed. On the same day as it announced this opinion the Supreme Court denied Argentina's appeal of a court order prohibiting Argentina from giving preference to certain creditors. This was the third case involving Argentina that term, with BG Group Plc v. Republic of Argentina involving Argentina's refusal to obey a neutral arbitrator's order and Daimler AG v. Bauman involving atrocities committed by the Argentinian military junta during its Dirty War. Background In 2001 Argentina was in a severe economic depression. NML Capital, a 'vulture fund' that specializes in distressed sovereign debt, purchased Argentine public bonds at extreme discounts off a panicking market. Argentina then defaulted on $103 billion of debt. After announcing that it would not pay its debts Argentina offered its creditors a choice: accept new bonds worth 70% less, or receive nothing. The vast majority of bondholders accepted the new bonds. NML Capital did not. Instead, NML Capital