Argentina loses round one in Ghana

In most countries, military and diplomatic assets owned by foreign states are untouchable by judicial action. That’s why the attempt to attack Argentine embassy accounts in France ultimately failed. But that does not — so far — seem to be the case in Ghana. The creditors are winning.

On October 11, 2012, Judge Richard Adjei Frimpong of the Commercial Division of the Ghanaian High Court held that the Argentine government had waived sovereign immunity in the initial bond contracts. (Technically, in the 1994 fiscal agency agreement attached to them.) I have not yet been able to get a copy of the ruling, but I have some idea of what the two sides in the case argued. Argentina’s lawyer, Latty Otu, argued two things. First, you can’t seize military vessels under the Law of the Sea. Second, the fiscal agency agreement only covered assets inside Argentina.  

The creditors’ lawyer, Ace Ankomah, posed several counterarguments. First, he argued that while the Law of the Sea recognizes that naval vessels are immune, it says nothing preventing states from waiving that immunity. Second, the fiscal agency agreement applies outside Argentina — the clauses specifically applying to assets located inside Argentina involved the assets that the government refused to allow to be attached.

This is not what I expected to happen. Now, there are two more appeals to go in the Ghanaian court system. The first is the Court of Appeals. The second is the Supreme Court. The fastest that these could go is three months. One thing that won’t happen is an intercession by the Ghanaian government. Government lawyers took Argentina’s side in court, but the Ghanaian government is not going to interfere with the legal process. Just yesterday, Argentina’s deputy foreign affaris and defense ministers  returned empty-handed from a visit to Ghana. Meanwhile, in Buenos Aires the head of Argentina’s intelligence services has had to resign — understandably, she should have seen the Ghana incident coming — as has the head of military strategic intelligence and the Chief of the Navy. Meanwhile, Argentina continues to rack up $50,000 a day in docking fees and around $550 per hour for a good lawyer. Still, there’s one good thing. After reports came out that the sailors on board the ARA Libertad reacted very badly to the visit by the Argentine negotiating party, Ace Ankomah’s office brilliantly announced that they stand willing to fly all the sailors home immediately at no charge.

If the Ghanaian court decision surprised me, the reaction of the Libertad’s crew to a visit by the Argentine negotiating team has me completely stonkered. From Clarín:

The team announced, “We want to bring the greetings and support of the Argentine people.” The sailors’ cold anger was visible. Witnesses to the visit stated that the team spent no more than 15 minutes on board before abandoning the ship for the Ghanaian capital. After the [pair of Argentine officials] left, the Libertad’s sailors dropped the pretense: they confessed to their superiors that they wanted to “punch them.”

 Oh, my.

I suspect that Argentina is going to get its ship back, but now it is just a hunch. Argentina is going to the International Tribunal for the Law of the Sea (located in Hamburg) for a judgment. Does anyone know anything about law to make a prediction about the Ghanaian appeal or the Tribunal’s ruling? If this one sticks, and a naval vessel really can be seized to force repayment of debt, we really will be in a revolution.

UPDATE: Argentina will evacuate the crew of the ship. No word on whether they will take the creditors’ offer to pay for their flights home.

Comments

[Jonathan]

Thanks for the updates! I look forward to hearing about how this all pans out. I am rooting for the ship to be given to the creditors, for some reason.