Argentine naval vessal detained in Ghana at request of hedge fund

[Steely Glint]

So, this is a bit of a bizarre one.

In their drive to extract full compensation from the Argentine government, a hard-nosed bunch of distressed debt investors have gone to impressive lengths. They’ve pursued the country’s assets around the globe, attempting to seize the presidential plane and menacing the Argentine booth at the Frankfurt Book Fair.

Now they have a big and bizarre fish on the hook: an Argentine naval vessel. NML Capital, a subsidiary of U.S. billionaire Paul Singer’s Elliott Capital, this week won an injunction in Ghanaian superior court to hold the ARA Libertad in the port city of Tema, on the outskirts of the African nation’s capital.

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Normally, a military vessel would not be subject to this kind of thing but apparently, it's status as a training vassal lends it some sort of quasi-military status which let the Ghanan court hand wave it.

Opinions?

[Hazir]

Interesting, it shows that defaulting doesn't necessarily mean your debts go away. A big lesson for some governments. Guess it also means that Argentina will have a much harder time than it thought if it tries to use its resources. I guess it's not unthinkable these people would try the same with a tanker owned by the Argentinean state oil company.

[Steely Glint]

They'd be more likely to try it and be successful with an state owned oil tanker than this ship, impounding it is of very questionable legality in my opinion. I wouldn't be entirely surprised to see an Argentine destroyer show up and demand the release of the ship, and I'm not sure whose side international law would be on in that case. Only the fact that the Argentine navy is such a basket case seems to be really preventing them.

[ar81]

In the past Argentine people have felt outraged when repaying debt showed up as more important than recovery of people, just like it happens today in US. Nowadays Argentina has an ideological difference with international bankers. Argentina has no debt and bankers are attempting to interfere with their ways anyway.

Economy minister Lorenzino said that Argentina showed that debt can be repaid with growth and not with austerity. Bankers have imposed austerity to many countries, sinking them into a recession and crisis that made debt harder to repay.

Lately, Lorenzino called Moody's a "pirate" as it downgraded Argentina one day before bond coupons were to be repaid. It is obviously a move to make some money by lowering coupons prices. Lorenzino said there is no reason for a downgrade as regulation regarding bonds have not changed, so the rules have not changed.

Argentina has implemented a series of measures that upset speculators, like the inability to speculate with dollar exchange rate, and not using dollar in their trade with China and Brasil. Nationalization of YPF also caused some ideological differences, but Argentina said the company was not investing to meet the terms of the "concesión" (govt contract). So it forced Argentina to import fuel instead of extracting it from its soil.

So all of this is part of a struggle between Mercosur and bankers. For Argentine people this is a fight to achieve sovereignity and independence from bankers. And it seems bankers do not like that and they try to blackmail the Argentine government.

[Loki]

They'd be more likely to try it and be successful with an state owned oil tanker than this ship, impounding it is of very questionable legality in my opinion. I wouldn't be entirely surprised to see an Argentine destroyer show up and demand the release of the ship, and I'm not sure whose side international law would be on in that case. Only the fact that the Argentine navy is such a basket case seems to be really preventing them.

I don't think the Argentinians would really want to give the UK an opportunity to invoke collective self-defense...

[LittleFuzzy]

So, this is a bit of a bizarre one.



more in the article

follow up article

Normally, a military vessel would not be subject to this kind of thing but apparently, it's status as a training vassal lends it some sort of quasi-military status which let the Ghanan court hand wave it.

Opinions?

People have held/seized warplanes before. :shrugs: The real reason one does not/cannot hold a navy vessel is because naval vessels can defend themselves.

[Steely Glint]

I don't think the Argentinians would really want to give the UK an opportunity to invoke collective self-defense...

Why? Because Ghana is a common-wealth realm?

[Steely Glint]

People have held/seized warplanes before. :shrugs: The real reason one does not/cannot hold a navy vessel is because naval vessels can defend themselves.

The reason is that naval vassal have diplomatic immunity. There's plenty of naval vassals in axillary roles which are either unarmed or too lightly armed to shoot their way out, including this one.

[Loki]

Why? Because Ghana is a common-wealth realm?

Collective self-defense applies to any UN member.

[Steely Glint]

Then why single out the UK? Because of the Falklands thing? That's directly counter to the strategy the government is perusing over the dispute.

[Loki]

Yes, because of the Falklands thing. Never hurts to rub in someone's weakness in their face.

[Steely Glint]

We should humiliate Argentina ever chance we get, in order to shame them into requipping their military and becoming more belligerent over the Falklands, make ourselves look like the bad guys and unite the whole of South America against us!

[Veldan Rath]

I agree with SG's sarcasm here. There is no gain to poke at a prior enemy like that. It would be counter productive.

[Loki]

We should humiliate Argentina ever chance we get, in order to shame them into requipping their military and becoming more belligerent over the Falklands, make ourselves look like the bad guys and unite the whole of South America against us!

Too late on pretty much every account.

[ar81]

Some updates...

Destituido el jefe de la Armada argentina por el escándalo de la fragata 'Libertad'
http://www.elmundo.es/america/2012/1...350342801.html

The ship was going to dock at Lagos, but it went to Tema port, Accra city, capital of Ghana. People in the diplomatic world had warned about the risks. In october 2 the ship was held after hedge fund ("fondo buitre", "vulture fund" for Argentine govt) NML-Elliot claimed default of Argentina government in 2002. The vicepresident of Liga Naval Argentina, Fernando Morales, said "we are in uncharted territory as it violates sea convention of 1982 signed by Ghana and Argentina that states that military ships in foreign lands cannot be seized or defended".

Admiral Carlos Alberto Paz, accused by the Casa Rosada for making the wrong decision of docking there, was fired as well as director general de organización y doctrina, comodoro Alfredo Mario Blanco, and secretario general naval, contralmirante Luis González Day.

Los mosquitos mortifican a la tripulación de la fragata argentina retenida en Ghana
http://www.elmundo.es/america/2012/1...350143360.html

They have 11 days detained. Argentina does not want to pay $20 million NML is asking to set the ship free. Argentine negotiatiors are negotiation with the "scavenger fund" and the issue of fuel is still undefined. The frigate had enough fuel to complete the other half of the trip, but it did not have enough to keep the kitchen, lights and air conditioning working in the suffocating tropical heat. Captain Lucio Salonio asked for "a few drops of fuel" but port authorities have not answered his request despite Argentina pays $400,000 a day for being docked there.

Mosquitos are harassing the crew when they walk in the port. And also some kids approach them to try to sell craft. The ministro de Asuntos Exteriores, Héctor Timerman, said that the act of this vulture fund is "an act of piracy", since school ships have diplomatic immunity.

[Loki]

Typical of Argentina to blame everyone but itself for its mistakes.

[ar81]

Typical of Argentina to blame everyone but itself for its mistakes.

Just like American media that provides coverage on arab spring and ignores the american spring?

[Steely Glint]

Yeah, just like that! Wait, what

[ar81]

Yeah, just like that! Wait, what

Spring, summer, autumn, winter...
Don't Americans have a spring?

Spring is a time for hope, when flowers emerge... but Americans are too distracted with the virtual videogame of economy, and they are beaten by it.

[Steely Glint]

Go start your own thread and stop shitting over mine.

[Loki]

I see that Alpha and kat continue merging into one uber-nut.