The Argentine sailing vessel the ARA Libertad, a focus of increasing international attention, remains firmly berthed in the port of Tema after Ghana’s Commercial Court held a hearing Tuesday.
The Commercial Court will determine whether to keep in place an injunction detaining the Libertad, which represents the latest effort by creditors of Argentina whom the country has refused to pay for over a decade. The Government of Argentina has so far failed to post a bond that would allow the ship and its crew to continue their voyage.
The case has drawn increasing interest in Ghana and around the world, particularly since Ghana is ranked very highly by international groups for good governance and adherence to the rule of law, while Argentina’s ranking is quite poor, near the bottom on the Center for Financial Stability’s Rule of Law Index.
The courtroom Tuesday was overflowing with observers, including the Argentine Ambassador to Nigeria, representatives of the Ghanaian navy, foreign ministry and attorney general’s office, attorneys, news reporters, and even schoolchildren.
The counsel for Argentina attempted to assert that the Libertad is a warship and therefore it was immune from the injunction, even though it is a sailing vessel used exclusively for training seamen and ceremonial purposes. The judge, who also presided over the initial hearing, pointedly asked Argentina’s counsel whether Argentina ever intends to pay its debts, and questioned him keenly about a UK court decision finding that Argentina waived all claims to sovereign immunity.
The lawyer for the plaintiff spoke at length in favor of continued detention of the vessel until a bond could be posted, noting that the immunity of warships can be waived under Ghana law, and that Argentina had in fact waived its immunity in the contract underlying the plaintiff’s claim. The presiding judge seemed to agree with the counsel’s line of argument, nodding his assent.
Towards the end of the plaintiff’s arguments before the Court, Justice Barbara Ackah-Yensu, the President of the Commercial Courts, entered with a group of students and was given a seat next to the bailiff. In conclusion, the judge indicated that his decision would be rendered at 0900 on Thursday, 11 October.
Argentina has been considered to be a pariah of international credit markets since it defaulted on its sovereign debt in 2001. As a consequence, Argentina has had its preferential bilateral trade status revoked by the U.S. Government. The U.S., U.K., Germany, Spain and Canada have in recent months have opposed any new development bank loans to Argentina. Argentina is also the subject of numerous suits before the World Trade Organization for unlawful restraint of trade.
By hearing arguments over the detention of the ship, the Ghanaian courts are following the precepts of domestic Ghanaian law and those of international law. In doing so, Ghana is continuing the process of helping to enforce over 100 judgments issued against Argentina by the U.S. District Court for the Southern District of New York and the Supreme Court of the United Kingdom.
The ARA Libertad was detained in Tema port following an injunction issued by Ghana’s Superior Court to the Judicature on 2 October to NML Capital Limited, a commercial creditor of the Republic of Argentina. Ghanaian port officials have indicated they will abide by the orders of the Ghanaian courts and will not release the Libertad from Tema unless the court so directs.
The ship arrived in the West African port on 1 October and was scheduled to depart on 4 October. It currently carries 317 persons, including 69 cadets from Argentina and nine other countries, according to testimony submitted by Argentina’s Defense Minister.
The injunction issued by the court prevents the ship from leaving the port until the Argentine government posts a bond at least equivalent to the value of the ship.
The value of the ship, however, is only a fraction of the total amount owed by Argentina to NML Capital and other creditors under U.S. and U.K. law. The Argentine government could cause the ship to be released at any time by posting a bond, but it has thus far refused to do so.
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