Miguel Nathan Licht's View1 Jul 2025 20:45
Miguel Nathan Licht - Lawyer. Doctor of Legal Sciences. President of the National Tax Court.
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(reposted by Seb Maril)
What the friend and excellent lawyer Sarabia Frias says regarding the impossibility of complying with the ruling because it forces the country to violate its domestic law is a defense that cannot succeed.
Let me exemplify: when Argentina went through the debt renegotiation process, Argentine law prohibited reopening the process. There was also a legal impediment. But the United States judiciary disregards domestic law when the country issues instruments governed by U.S. private law. On that occasion, they were bonds; now they are shares.
During the process of restructuring Argentina’s sovereign debt, our legal framework prohibited reopening the exchange —the famous RUFO clause, among other provisions— and yet, that did not prevent the New York judiciary from advancing relentlessly over the supposed normative immunity of our local legislation. The American judges did not hesitate to declare Argentine law irrelevant when it came to interpreting contracts governed by New York State law. And why? Because, by issuing bonds under foreign jurisdiction, Argentina not only waived invoking its domestic law as a shield but also explicitly agreed to submit to a logic that disregards the privileges of local sovereignty.
The same applies now, mutatis mutandis. That time it was public securities; today it is shares. Yesterday it was default; today it is the alleged breach of YPF’s contract. But the common point is essential: Argentina voluntarily submitted to a foreign legal regime —U.S. private law— and, therefore, must face the consequences of that submission. It cannot now claim the impossibility of compliance due to the existence of domestic regulations that, by the way, it has itself subordinated. It is like wanting to be part of the game and, at the same time, invoking its own domestic rules when the international ones become adverse.
The historical example of the NML Capital Ltd. v. Republic of Argentina ruling in New York’s Second Circuit is as illustrative as it is devastating. There, too, an attempt was made to invoke Argentine law as an impediment to complying with what the U.S. courts considered an obligation assumed under their own laws. The result was a wave of seizures, blockades, and procedural losses.
In summary, if Argentina has chosen —whether for financial strategy, political necessity, or diplomatic error— to be governed by external rules, it cannot later claim the violation of domestic law as a reason for non-compliance.
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