NEW YORK: A US court on Friday dismissed an appeal by Citibank and Argentina to let the country make payments on debt tied up in a bitter legal battle with hedge funds.
The Federal Appeals Court for the Second Circuit ruled it did not have jurisdiction in the case and sent the appellants back to New York District Judge Thomas Griesa, who has blocked Argentina from servicing its restructured debt until it settles its $1.3bn dispute with the two US hedge funds.
The acrimonious court battle has forced Argentina to default on its debt for the second time in 13 years, after Griesa blocked it from paying creditors who agreed to take huge losses on their bonds until it pays the hedge funds in full. Citibank was caught up in the row when Griesa expanded his initial payment freeze to include bonds issued under Argentine law.
That is the portion of Argentina’s debt for which Citibank is the payment agent.
The three appeals court judges ruled the change-up was beyond their purview.
“We decline to find jurisdiction because the order appealed from is a clarification, not a modification, of the amended February 23, 2012 order,” they said in their ruling. “However, nothing in this court’s order is intended to preclude Citibank from seeking further relief from the district court.” AFP
