Commercial Court rules in favour of holders of GDP-linked securities against the Republic of Argentina

Mr Justice Picken has delivered a judgment against the Republic of Argentina (“the Republic”) ordering it to pay EUR 1.33 billion, plus interest, in favour of certain investors (including the Claimants) who purchased Euro-denominated securities issued by the Republic in 2005 and 2010 (“the Securities”): Palladian Partners LP & Ors v Republic of Argentina [2023] EWHC 711 (Comm). The securities were linked to the Republic’s gross domestic product (“GDP”) and were issued by the Republic as part of the largest sovereign debt restructuring in history.

The case concerned payment under the Securities for the 2013 reference year.  The complication was that, in March 2014, the Republic had ceased publication of GDP statistics in 1993 year of base prices, having rebased its GDP to 2004 year of base prices.  Accordingly, the Court was required to apply a provision in the Securities dealing specifically with the situation where GDP was rebased during the life of the Securities (referred to by the Court and the parties as “the Adjustment Provision”).  The Claimants contended that on the correct construction and application of the Adjustment Provision, the conditions for payment in the Securities for reference year 2013 had been met.  They contended in the alternative that the Republic had acted in bad faith and for an improper purpose when it ceased publication of GDP statistics in 1993 year of base prices (i.e. to prevent a payment in reference year 2013). 

Mr Justice Picken ruled in favour of the Claimants on the construction question and granted the declarations sought and a monetary judgment.  The Judge did not decide upon the Claimants’ alternative case. 

James Shaerf was a member of the successful counsel team acting on behalf of the Claimants, led by Sue Prevezer KC (Brick Court) and Alex Barden (Fountain Court), and instructed by Quinn Emanuel Urquhart & Sullivan UK LLP.

The judgment is here.