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updated: 12/15/2012 11:02 PM

U.N. court orders Ghana to release of Argentine ship

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  • Argentina's three-masted navy training tall ship ARA Libertad, which was seized on Oct. 2 as collateral for unpaid bonds dating from Argentina's economic crisis a decade ago, sits docked at the port in Tema, outside Accra, in Ghana Friday.

      Argentina's three-masted navy training tall ship ARA Libertad, which was seized on Oct. 2 as collateral for unpaid bonds dating from Argentina's economic crisis a decade ago, sits docked at the port in Tema, outside Accra, in Ghana Friday.
    Associated Press

 
Associated Press

BERLIN -- A United Nations court ordered the immediate release Saturday of an Argentine navy training ship and crew detained in Ghana two months ago at the request of an American hedge fund.

The ARA Libertad training ship was seized Oct. 2 in the port of Tema as collateral for unpaid bonds dating from Argentina's economic crisis a decade ago.

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Argentina appealed to the Hamburg, Germany-based U.N.'s International Tribunal for the Law of the Sea for the ship's release, arguing that as a warship the Libertad is immune from being seized.

In an expedited ruling that sided with Argentina's argument, the court ordered that Ghana "forthwith and unconditionally release the frigate ARA Libertad" and ensure the ship and its crew can leave Ghanaian waters. It also ordered that the vessel should be resupplied as needed.

Detaining the ship was "a source of conflict that may endanger friendly relations among states," the court said.

The ruling leaves untouched the parties' rights to seek further international arbitration on the matter.

Argentine Economy Minister Hernan Lorenzino hailed the court's decision and vowed to continue fighting what President Cristina Fernandez has called "vulture funds."

"Argentina will continue to defend itself from the financial pirates," Lorenzino said via Twitter on Saturday. "Vultures, you won't succeed, with the ship nor with the debt."

Susana Ruiz Cerutti, the head of Argentina's sea tribunal, told the Telam state news agency that the order to release the Libertad "should serve as a lesson to the vulture funds." She praised the ruling for being unanimous and for siding with the vessel's captain, who had been accused of contempt.

Ghana courts ordered the ship detained on a claim by Cayman Islands-based NML Capital Ltd. Its owner, American billionaire Paul Singer, leads a group demanding payment in full, plus interest -- about $350 million -- for dollar-based Argentine bonds bought at fire sale prices after Argentina's 2001-2002 economic collapse forced a sharp devaluation of its currency.

The vast majority of bondholders accepted about 30 cents on the dollar years ago, and that is roughly what the holdouts led by Singer initially paid for the bonds.

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