I thought they basically declared bankruptcy and reorganized. This was fought in a US court? Why not in an Argentine court? Why do they need to comply with a court ruling in another country? (Unless the bonds were sold on that basis?)
It’s a bit complicated but if you really want to know:
http://dealbook.nytimes.com/2014/02/25/argentina-takes-its-debt-case-to-the-u-s-supreme-court/?_php=true&_type=blogs&_r=0
Their willingness to fund an insolvent county's sovereign debt allowed at least some of the assets to be saved. Now the Argentinians are calling the people who salvaged their miserable country "vultures."
The Argentinians never learn. Several years ago, they decided to nationalize their country's oil reserves, in effect stealing tens of billions of dollars from petrochemical companies that had invested in Argentina. Now they wonder why foreign investment is so difficult to attract.
Actions have consequences, and markets remember.
The governing law of the bonds they sold was New York law.
They would not have been able to sell the bonds otherwise.
They agreed to abide by the law of the contract.
They need to comply with the US court ruling if they ever want to borrow money on the global market again.
A judgement could attach assets in America
“I thought they basically declared bankruptcy and reorganized.”
The terms and conditions of the loan contract/s explicitly waived Argentina’s sovereign immunity as a consideration for receiving the loan. When Argentina then defaulted on repayment of the loan yet again, Argentina used sovereign immunity to deny repayment of the loan on the original terms and conditions despite the waiver of sovereign immunity.
“This was fought in a US court? Why not in an Argentine court?”
The contract agreement specified U.S. jurisdiction for a dispute.
“Why do they need to comply with a court ruling in another country? (Unless the bonds were sold on that basis?)”
Argentina agreed to do so in the contract/s, and international law supports U.S. jurisdiction in the absence of contract terms to that effect.