If you are an investor in Argentina’s exchange bonds (the ones governed by English law) perhaps so. Mr Justice Newey was asked by some of these investors for:
a declaration that the €225 million [held by BNY Mellon] is held on the English law trust…, .. a declaration that, as a matter of English conflicts of law, an order of a foreign Court is ineffective in varying a contract governed by English law and .. an interim injunction restraining the Bank … from dealing with or disposing of the €225 million (or any other funds paid to it by the Republic in respect of the euro-denominated Exchange Bonds) other than by paying the money to the beneficial holders of the bonds…
The Judge suggested that had Judge Griesa been informed that an English court took the view that the provisions of the relevant trust meant that Argentina had no interest in the moneys in question such that BNY Mellon could not be required to return them to Argentina he might have based his decision not to order Argentina to return the money on this reason rather than on the fact that the FSIA does not authorize attachment or execution of sovereign property located outside the United States:
I have in the end been persuaded that a declaration from an English Court that the €225 million is held on trust for the holders of the euro-denominated Exchange Bonds and the second defendant (and, correspondingly, that the Republic has no beneficial interest in the money) is likely to be of interest to an American Court having to consider issues relating to the funds. It is noteworthy that, when he denied the turnover motions, Judge Griesa did so by reference to the Foreign Sovereign Immunities Act, not on the basis that the Republic could have no interest in the funds, an issue which he did “not reach”. Had there been a ruling from an English Court, the Judge might have felt able to proceed on the basis that the Republic could have no interest in the €225 million. Again, Judge Griesa might not have thought in terms of the money simply being returned to Argentina (as he did at the hearing on 27 June 2014) had it been evident from an English order that it was held on trust exclusively for the holders of the relevant bonds and the second defendant.
I am not at all sure about whether this would have changed the basis for Judge Griesa’s decision. The judge decided to allow an opportunity for the holdout creditors to express their views on the proposed declarations before making them. But it looks very much as though BNY Mellon will be in an uncomfortable position when the dust settles.