ARA Libertad seized by hedge fund

ARA Libertad

Officials of the Ghana Ports and Harbors Authority (GPHA), which runs Tema Port, seized the ARA Libertad on the orders of a United States court and said they would only release it after a court order to do so.The Argentine training ship has been seized in Ghana, on a court order obtained by a US bondholder, who lost money when Argentina defaulted on its debts a decade ago.

 On Octoer 2, a Ghanaian court issued an injunction and interim preservation order to NML Capital Ltd, a subsidiary of Elliott Capital Management.

 Background
In 1994 the Republic of Argentina issued a series of sovereign bonds. The bonds contained a clause dealing with jurisdiction and immunity in relation to claims on the bonds and were subject to New York law. Between June 2001 and September 2003 NML Capital Ltd bought a number of bonds at between 55.37% – 62.82% of their face value. In November 2003, NML declared “events of default” based on the subsequent failures by Argentina to pay interest as it fell due on the bonds. Argentina sought to restructure its external debt to a sustainable level in 2005 but NML refused to take part in any restructuring offer, instead bringing a claim in New York seeking payment of the principal amount of the bonds that had fallen due (US$284,184,632.30). On 18 December 2006 the US District Court of the Southern District of New York entered judgment against Argentina in favour of NML for the sum claimed.