Bainbridge Fund LTD v. The Republic of Argentina

Background

Bainbridge sued the Republic of Argentina to recover amounts allegedly due after Argentina defaulted on certain global debt securities. In December 2020, with Argentina’s consent, the court granted Bainbridge summary judgment on its claim concerning the US040114GG976 Bonds, governed by the 1994 Fiscal Agency Agreement. The court entered judgment for $95,424,899.38, including principal and interest through December 1, 2020. The Republic had not paid that judgment.

Enforcement request

Bainbridge later moved under Federal Rule of Civil Procedure 69(a)(1) and New York Civil Practice Law and Rules § 5225(a) for an order requiring Argentina to turn over foreign assets sufficient to satisfy the judgment. Bainbridge argued that § 5225 authorized the court to direct Argentina to transfer specified assets held at the Central Bank of Argentina into New York. It also relied on § 5225(c), which permits a court to order a person to execute and deliver documents needed to make a payment or delivery.

Argentina opposed the motion. Among other arguments, it asserted that the Foreign Sovereign Immunities Act protects the relevant assets from enforcement because they are located outside the United States.

Issue identified by the court

The court noted that New York’s statutory definition of “judgment debtor” refers to a “person,” and that § 5225(c) likewise refers to “any person.” The Court of Appeals had recently explained, in a prior related proceeding, that the term “person” in another New York statute did not include Argentina as a sovereign. The court therefore identified a separate question: whether § 5225 applies to a sovereign such as Argentina at all, apart from whether the Foreign Sovereign Immunities Act protects assets located outside the United States.

The court also stated that, if § 5225 does not apply to Argentina, the parties should address whether Argentina waived or forfeited that argument.

Order

The court ordered additional briefing rather than deciding the enforcement motion. Bainbridge was required to file an opening brief of no more than ten double-spaced pages by March 16, 2023. Argentina was required to file a response of no more than ten double-spaced pages by March 30, 2023, and Bainbridge was permitted a reply of no more than five double-spaced pages by April 5, 2023. The order did not resolve whether the statute applies to Argentina, whether the argument was waived or forfeited, whether the Foreign Sovereign Immunities Act protects the assets, or whether the assets must be transferred.