Argentina asks UN court to make Ghana free ship

AP News
Posted: Nov 12, 2012 4:47 PM
Argentina asks UN court to make Ghana free ship

BUENOS AIRES, Argentina (AP) — Argentina will ask a U.N. court to order the release of a navy sailing ship seized in Ghana unless the African country releases it within a day, officials announced Monday.

The ARA Libertad training ship was seized on Oct. 2 in the port of Tema as collateral for unpaid bonds dating from Argentina's economic crisis a decade ago. Foreign Minister Hector Timerman said if Ghana does not free the vessel by Tuesday, Argentina will appeal to the International Sea Tribunal in Hamburg, Germany.

"The legal representatives of the Foreign Ministry are already in that city to begin the legal actions," Timerman said Monday in a press conference at government house.

Argentina argues that as a warship, the Libertad is immune from being seized and it says it will take the issue to the arbitrage court under a United Nations convention on the rights of the sea.

Timerman said the government also asked Ghana to immediately restore power and water services that were shut off last week when Argentina refused to let it be moved to a less-busy part of the port.

Argentina's sailors then displayed rifles to prevent Ghanaian officials from boarding the vessel in an attempt to move it.

"(Ghanaian officials) put a halt to this action and the calm has returned," Defense Minister Arturo Puricelli told reporters at the press conference. "But power and water services have not been restored."

Ghanaian Justice Richard Agyei-Frimpong ruled last week that the vessel should be moved because it is keeping other ships from berthing. Port officials say the port it losing tens of thousands of dollars per day in berthing fees.

The court ordered it held at port due to a court order in New York for Argentina to pay $1.3 billion to a group of investors in the country's defaulted debt.

Timerman said Argentina appealed the judge's November 5 order to move the ship to another dock. Since the ruling is suspended until a higher court in Ghana's rules on the issue, Argentina is not in contempt, he said.

Ghana courts seized the ship on a claim by Cayman Islands-based NML Capital Ltd. Its owner, billionaire investor Paul Singer, leads a group demanding payment in full, plus interest, for dollar-based Argentine bonds bought at fire sale prices after Argentina's 2001-2002 economic collapse forced a sharp devaluation of its currency.

The vast majority of bondholders accepted about 30 cents on the dollar years ago, and that is roughly what the holdouts led by Singer initially paid for the bonds.

NML Capital has said Argentina owes it about $350 million, and has offered to let the ship leave if Fernandez's government put up a $20 million bond to be forfeited. Fernandez says the embargo of the ship is illegitimate and that Argentina will not negotiate with what she calls "vulture funds."

Argentina "will just not pay in any way ... creating more poverty and social conflict," Fernandez said shortly after in a speech, repeating words by her late husband and predecessor, President Nestor Kirchner.

But Argentina is in a tough spot beyond the seized ship.

Last month, it lost a long battle against the same fund in U.S. courts when an appellate panel rejected every argument the South American country made against paying $1.33 billion to holdout investors.

That ruling effectively gives Argentina a stark choice: pay holders of restructured and defaulted debt equally, or pay none of them at all.

U.S. District Judge Thomas Griesa has ruled that Argentina must pay the holdouts part of the money and has warned Fernandez not to "defy and evade" his orders on how much it should pay.

Griesa will decide the amount Dec. 1, a day before Argentina is due to make the first of three payments of more than $3 billion to bondholders who accepted restructuring of their debt at a loss.