Argentine Naval Ship Libertad Subject to Prejudgment Attachment by Ghana Court Order

Don Anton, Associate Professor of Law at the Australian National University College of Law, has commented to SBS World News Australia on a unusual jurisdictional dispute that has arisen between Argentina and Ghana.

The dispute has flared over successful preliminary proceedings brought by Argentinian creditors in the courts of Ghana.  The conflict stems from a 2002 default by Argentina on sovereign debt and creditors who refused to accept a settlement of their claims at 70% below the amount invested.  As Julian Ku relates, these investors have been pursuing their claims in the U.S. and U.K., but without much to show for their efforts despite obtaining a summary judgement in the U.S. against Argentina in excess of $280 million.

That may have changed earlier in October when it is reported that a court in Ghana ordered the pre-judgment attachment of the Libertad, a Argentinian naval ship.  Ordinarily, state property not in commercial service or use is entitled to jurisdictional immunity in other states.  A state warship is presumed not to be in commercial service.  Here, however, the creditors claim that immunity has been waived — even for official state property not in commercial use.  See generally the Convention on Jurisdictional Immunities of States and Their Property.  Julian Ku provides details of the waiver and its interpretation in U.S. courts.  The waiver:

as described in a recent U.S. Court of Appeals for the Second Circuit decision: (E.M. Ltd. V. Republic of Argentina (2d Cir. Aug. 20, 2012) [provides]: “To the extent the Republic [of Argentina] or any of its revenues, assets or properties shall be entitled … to any immunity from suit, … from attachment prior to judgment, … from execution of a judgment or from any other legal or judicial process or remedy, … the Republic has irrevocably agreed not to claim and has irrevocably waived such immunity to the fullest extent permitted by the laws of such jurisdiction…”

… In U.S. litigation, courts have held that this waiver allows U.S. courts to attach Argentina state assets that are used for a commercial activity.  (NML Capital v. Argentina, 680 F.3d 254 (2d Cir. 2012)).

Without having seen the Order issued by the court in Ghana, it appears that the Ghanaian court may take a view more favourable to creditors.  It is possible that the court believes that the Argentinian waiver is a complete waiver and includes warships and other state property on or in government non-commercial service.  If this is so, then the Ghanaian court would have jurisdiction and could order pre-judgment attachment and post-judgment execution.

UPDATE: On 14 November, 2012 Argentina requested that the International Tribunal for the Law of the Sea indicate provisional measures in its dispute with Ghana over the frigate Ara Libertad (Argentina v. Ghana).

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