On June 16, 2014, the U.S. Supreme Court issued two decisions in Republic of Argentina v. NML Capital, Ltd., one of the many cases to have arisen out of Argentina’s 2001 default on over $100 billion in sovereign bonds. While various parties have obtained judgments against Argentina based on that default, none of those parties has managed to execute their judgments, despite ongoing and determined efforts to do so. The Court’s June 16 decisions addressed, inter alia, whether the Foreign Sovereign Immunity Act (FSIA) restricts post-judgment discovery concerning a foreign sovereign’s non-U.S. assets, and also whether U.S. courts can enter injunctive relief to enforce an equal treatment/pari passu provision contained in bonds issued by a foreign state. The Court ruled against Argentina in both cases, authorizing the district court’s order permitting broad discovery into Argentina’s non-U.S. assets, and denying its petition for certiorari in connection with the pari passu injunctions.

A. Post Judgment Discovery -

NML Capital holds judgments against Argentina totaling approximately $2.5 billion, and has been pursuing discovery of Argentina’s assets since 2003. In 2010, NML served subpoenas on two non-party banks (one based in the U.S., the other based in Argentina with a branch in New York) seeking general information about Argentina’s assets in the U.S. and abroad. The U.S. District Court for the Southern District of New York granted a motion to compel compliance with the subpoenas, finding that the FSIA did not categorically prohibit discovery into non-U.S. assets and holding that it would serve as a “clearinghouse for information” concerning Argentina’s assets. The U.S. Court of Appeals for the Second Circuit affirmed, holding that because the district court’s order was limited to discovery and did not actually seek to attach or execute any property, and further because the order was directed at third parties as opposed to Argentina itself, it did not offend Argentina’s immunity.