Argentine defaulted bond holders demand ‘strict neutrality’ from the IMF
A group of Argentine sovereign defaulted bond-holders have blasted the IMF for its announced intention of filing an amicus brief in support of Argentina before the US courts stating that “there is no role for direct involvement by the IMF in this matter” and any intervention by the IMF “favouring Argentina's request would also clearly violate the Fund's strict commitment to neutrality”.
The American Task Force Argentina, AFTA, Chair Robert Shapiro, following news of the IMF plans issued the following statement:
It has been reported that the IMF is considering filing an amicus brief before the U.S. Supreme Court in a case involving Argentina's refusal to honour its contract with bondholders under NY law. Any court filing by the IMF in this matter seems very ill-advised. The Court has not asked for the IMF views, in fact, it has not even asked for the U.S. Government's views. For that reason, the U.S. Government has determined not to get involved at this time. In any event, this is a private lawsuit based on a contract dispute in which the only issue facing the Supreme Court is the interpretation of U.S. federal statutes. There is no role for direct involvement by the IMF in this matter.
An intervention by the IMF favouring Argentina's request would also clearly violate the Fund's strict commitment to neutrality, which prohibits IMF involvement in disputes between its members and third parties. The Fund has faithfully adhered to this principle for decades. Breaking this bedrock policy could only tarnish the Fund's reputation for impartiality.
It should also be noted that the party the IMF seeks to support, the Argentine Government, has said it will not obey the U.S. Supreme Court if it upholds the rulings of the U.S. District Court and the U.S. Court of Appeals in favour of Argentina's bondholders. This is an astonishing assertion, given that in its bond contract Argentina pledged to abide by New York law, to submit itself to the jurisdiction of U.S. courts, and to irrevocably waive its sovereign immunity. For the IMF now to unilaterally step into this U.S. judicial proceeding, on behalf of a nation that has explicitly said it will not respect an adverse finding by the highest court of the United States --the most important member and largest funder of the IMF-- would set a troubling precedent that could only harm the IMF.
The American Task Force Argentina (ATFA) is an alliance of organizations united for a just and fair reconciliation of the Argentine government's 2001 debt default and subsequent restructuring. Our members work with lawmakers, the media, and other interested parties to encourage the United States government to vigorously pursue a negotiated settlement with the Argentine government in the interests of American stakeholders. To contact us, email to firstname.lastname@example.org.