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  • Debt campaigners hold a pots and pans protest against vulture fund attack on Argentina in New York. 26 February 2013.

    Debt campaigners hold a pots and pans protest against vulture fund attack on Argentina in New York. 26 February 2013. | Photo: Jubilee Debt Campaign

Published 14 February 2015

A British judge ruled that the blockade imposed by a U.S. court  should no longer be followed in the European capital.

Argentina won another victory in its ongoing “vulture funds” battle Friday when a British judge supported the unblocking of the country's debt repayment, weakening the position of the vultures who have been desperate to collect from the Argentine state.

Read more: What You Need To Know About Argentina’s Vulture Creditors

Judge Guy Newey ruled that the blockade imposed by a U.S. court July last year at the request of the vultures against Argentina's payment of restructured debt in New York and London, should no longer be followed in the European capital.

Billionaire creditor George Soros and other financiers decided to sue Bank of New York Mellon in London when U.S. Judge Thomas Griesa chose to freeze the US$500million payment by Argentina.

The U.S. judicial decision sparked a debt crisis in Argentina, which has not been able to continue to pay the expiration dates of interest on the bonds issued there, for about US$1.2 billion, and in the United Kingdom some US$1.7 billion.

The U.K. High Court had delayed making a formal declaration over the Argentine debt that fell under its domain since November last year. The bond holders have petitioned the court arguing that because the bonds were issued under English law, they must be allowed to be paid.

Creditors who negotiated repayment with the Argentine state have been unable to be paid as funds have been frozen in a trust account since U.S. judge Griesa ruled that they could not be paid without paying at the same time the other bond holders who did not negotiate the debt restructuring.

Vulture funds are hedge funds that typically buy up debt of poor nations at low prices and then seek full payment often by filing lawsuits against the debtor while seeking a high return, including interests.

They are companies that do not hesitate to use the law to leverage profit out of sovereign nations. The goal is high returns at bargain prices.

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