Republic of Argentina in Italian Appellate Victory in Bondholder Litigation

March 3, 2005

Cleary Gottlieb won a decision from a three-judge panel of the Tribunal of Rome rejecting the effort by Italian holders of Argentine bonds to freeze assets of the Republic of Argentina following its suspension of payment on external debts.

This was the first Italian appellate decision to uphold Argentina’s position that Italian courts lack jurisdiction over claims relating to the Republic’s decision to suspend payments on its external indebtedness, since the measures are an exercise of the country’s sovereign powers, even if the original issuances of the bonds were commercial acts outside the protection of the sovereign immunity doctrine and notwithstanding the waiver of sovereign immunity clauses set forth in those bonds. Cleary Gottlieb has previously won lower court decisions in Milan, Brescia, Vicenza, Florence and Rome upholding Argentina’s position.