47-92 (Vol. 2)
LA CLÁUSULA PARI PASSU A LA LUZ DEL CASO “NML CAPITAL, LTD. C. REPÚBLICA ARGENTINA (The Pari Passu Clause in the Light of the NML Capital, Ltd. v The Republic of Argentina Case)
Authors: Alejandro E. COTO y Nicolás MONCAUT
Number of views: 176
In the context of The Brady Plan, the Argentine Republic executed in 1994 a Fiscal Agency Agreement contract for the issuance of external indebtedness bonds. Following its default in year 2001, Argentina began a external debt restructuring process in 2004/5 and another in 2010. Although its offers achieved a bondholder acceptation rate superior to the 90% of its total external debt, a group of creditors decided to hold out and demanded the full payment
of its credits before the justice of New York. In the proceeding of its suits, one of the holdouts (NML Capital, Ltd.) required for the special and literal performance of the pari passu clause of the Fiscal Agency Agreement in order to suspend the payment of the restructured external debt — and accomplished its goal.
This article analyzes different interpretations of the pari passu clause, including the one performed by the judge Thomas Poole Griesa in the case that was crowned as the Trial of the Century in sovereign debt restructurings.