NML CAPITAL, LTD. v. REPUBLIC OF ARGENTINA
699 F.3d 246 (2012)
NML CAPITAL, LTD., Aurelius Capital Master, Ltd., ACP Master, Ltd., Blue Angel Capital I LLC, Aurelius Opportunities Fund II, LLC, Pablo Alberto Varela, Lila Ines Burgueno, Mirta Susana Dieguez, Maria Evangelina Carballo, Leandro Daniel Pomilio, Susana Aquerreta, Maria Elena Corral, Teresa Munoz De Corral, Norma Elsa Lavorato, Carmen Irma Lavorato, Cesar Ruben Vazquez, Norma Haydee Gines, Marta Azucena Vazquez, Olifant Fund, Ltd., Plaintiffs-Appellees,
The REPUBLIC OF ARGENTINA, Defendant-Appellant.
Docket Nos. 12-105(L), 12-109(CON), 12-111(CON), 12-157(CON), 12-158(CON), 12-163(CON), 12-164(CON), 12-170(CON), 12-176(CON), 12-185(CON), 12-189(CON), 12-214(CON), 12-909(CON), 12-914(CON), 12-916(CON), 12-919(CON), 12-920(CON), 12-923(CON), 12-924(CON), 12-926(CON), 12-939(CON), 12-943(CON), 12-951(CON), 12-968(CON), 12-971(CON).
United States Court of Appeals, Second Circuit.
Argued: July 23, 2012.
Decided: October 26, 2012.
Theodore B. Olson (Matthew D. McGill, Jason J. Mendro, on the briefs), Gibson, Dunn & Crutcher LLP, Washington, D.C.; Robert A. Cohen, Charles I. Poret, Eric C. Kirsch, Dechert LLP, New York, N.Y., for Plaintiff-Appellee NML Capital, Ltd.
Michael C. Spencer, Milberg LLP, New York, N.Y., for Plaintiffs-Appellees Pablo Alberto Varela, et al.
Edward A. Friedman, Daniel B. Rapport, Friedman Kaplan Seiler & Adelman LLP, New York, N.Y.; Jeffrey A. Lamken, MoloLamken LLP, Washington, D.C., for Plaintiffs-Appellees Aurelius Capital Master, Ltd., ACP Master, Ltd., Blue Angel Capital I LLC, and Aurelius Opportunities Master Fund II, LLC.
David W. Rivkin, Suzanne M. Grosso, Debevoise & Plimpton LLP, New York, N.Y.; Ronald Mann, Esq., pro se, New York, N.Y., for Amici Curiae Prof. Ronald Mann and EM Ltd., in support of Plaintiffs-Appellees.
Walter Rieman, Andrew W. Amend, Paul, Weiss, Rifkind, Wharton & Garrison LLP, New York, N.Y., for Amici Curiae Montreux Partners, L.P. and Wilton Capital, in support of Plaintiffs-Appellees.
Richard A. Samp, Washington Legal Foundation, Washington, D.C., for Amicus Curiae the Washington Legal Foundation, in support of Plaintiffs-Appellees.
Kevin S. Reed, Quinn Emanuel Urquhart & Sullivan, LLP, New York, N.Y., for Amicus Curiae Prof. Kenneth W. Dam, in support of Plaintiffs-Appellees.
John D. Clopper (Jeannette A. Vargas, Sarah S. Norman, on the brief), Assistant United States Attorneys, for Preet Bharara, United States Attorney for the Southern District of New York, N.Y.; Stuart F. Delery, Acting Assistant Attorney General, Mark B. Stern, Sharon Swingle, Attorneys, Appellate Staff, Civil Division, Department of Justice, Washington, D.C.; George W. Madison, General Counsel, Department of the Treasury, Washington, D.C.; Harold Hongju Koh, Legal Advisor, Department of State, Washington, D.C., for Amicus Curiae the United States of America, in support of Defendant-Appellant.
Paul Saltzman, Joseph R. Alexander, H. Rodgin Cohen, Michael Wiseman, The Clearing House Association L.L.C., New York, N.Y.; Sergio J. Galvis, Joseph F. Neuhaus, Michael J. Ushkown, Sullivan & Cromwell LLP, New York, N.Y., for Amicus Curiae the Clearing House Association L.L.C., in support of Defendant-Appellant.
Before: POOLER, B.D. PARKER and RAGGI, Circuit Judges.
BARRINGTON D. PARKER, Circuit Judge:
The Republic of Argentina appeals from permanent injunctions entered by the United States District Court for the Southern District of New York (Griesa, J.) designed to remedy Argentina's failure to pay bondholders after a default in 2001 on its sovereign debt. The district court granted plaintiffs summary judgment and enjoined Argentina from making payments on debt issued pursuant to its 2005 and 2010 restructurings without making comparable payments on the defaulted debt. We hold that an equal treatment provision in the bonds bars Argentina from discriminating against plaintiffs' bonds in favor of bonds issued in connection with the restructurings and that Argentina violated that provision by ranking its payment obligations on the defaulted debt below its obligations to the holders of its restructured debt. Accordingly, we affirm the judgment of the district court; we find no abuse of discretion in the injunctive relief fashioned by the district court, and we conclude that the injunctions do not violate the Foreign Sovereign Immunities Act ("FSIA"). However, the record is unclear as to how the injunctions' payment formula is intended to function and how the injunctions apply to third parties such as intermediary banks. Accordingly, the judgment is affirmed except that the case is remanded to the district court for such proceedings as are necessary to clarify BACKGROUND
these two issues. See United States v. Jacobson, 15 F.3d 19, 22 (2d Cir.1994).
In 1994, Argentina began issuing debt securities pursuant to a Fiscal Agency Agreement ("FAA Bonds"). A number of individual plaintiffs-appellees bought FAA Bonds starting around December 1998. The remaining plaintiffs-appellees, hedge funds and other distressed asset investors, purchased FAA Bonds on the secondary market at various times and as recently as June 2010.1 The coupon rates on the FAA Bonds ranged from 9.75% to 15.5%, and the dates of maturity ranged from April 2005 to September 2031.
The FAA contains provisions purporting to protect purchasers of the FAA Bonds from subordination. The key provision, Paragraph 1(c) of the FAA, which we refer to as the "Pari Passu Clause," provides that:
[t]he Securities will constitute ... direct, unconditional, unsecured and unsubordinated obligations of the Republic and shall at all times rank pari passu without any preference among themselves. The payment obligations of the Republic under the Securities shall at all times rank at least equally with all its other present and future unsecured and unsubordinated External Indebtedness....