Judgment against the Republic of Argentina for EUR 1.330 billion for holders of Securities

05/04/23

Palladian Partners LP and Ors v The Republic of Argentina and Ors

Mr Justice Picken has delivered judgment today against the Republic of Argentina for approximately EUR 1.330 billion, with interest at 2% above Eurobor from 15 December 2014, in favour of certain institutional and corporate investors who purchased Euro denominated Securities, linked to the Republic’s GDP,  issued by the Republic in 2005 and 2010. The Securities were issued by the Republic as part of a major sovereign debt restructuring launched in 2005, in the wake of a national financial crisis of an unprecedented scale. The 2005 and 2010 debt exchanges represented the largest sovereign debt restructuring in history.

The investors commenced their claims in 2019 for payment under the Securities for the reference year 2013 and all the years thereafter. The investors claimed that on the proper construction of the Securities, the conditions for payment thereunder were satisfied for the year 2013, notwithstanding that the Republic had rebased GDP and had ceased measuring or publishing GDP data in 1993 prices as required under the Securities.  The investors sought a declaration as to the proper construction of the Securities and payment of the sum due for 2013, together with an order for specific performance requiring the Republic to apply the correct construction going forward. The investors also brought a claim, in the alternative, that the Republic had acted in bad faith in producing certain GDP data in March 2014, in order to avoid making payment for 2013.

The Republic’s initial application to strike out the claim was dismissed by Miss Justice Cockerill in July 2020 [2020] EWHC 1946 (Comm), and the claims went to trial before Mr Justice Picken in October 2022.

In his Judgment, Mr Justice Picken found in favour of the investors on the construction claim and granted the declarations sought and a monetary judgment of EUR 1.330 billion (with interest). Having found for the investors on construction, the Judge held that it was unnecessary and undesirable to consider the investors alternative case.

The Republic has indicated its intention to apply for permission to appeal the Judgment and a consequentials hearing is scheduled for June 2023.

The judgment is here.