NML Capital, Ltd. v. Banco Central De La República Argentina
652 F.3d 172
| 2d Cir. | 2011Background
- FRBNY funds held in BCRA's FRBNY account, totaling about $105 million as of December 30, 2005, with sources including interbank deposits, currency operations, and transfers to BIS.
- Plaintiffs EM Ltd. and NML Capital hold final judgments against the Republic of Argentina totaling roughly $2.4 billion and seek attachment/restraint of the FRBNY Funds to satisfy those judgments.
- In 2005, Argentina issued Kirchner Decrees purportedly transferring ownership of certain BCRA assets, including FRBNY Funds, to the Republic to repay IMF debt, which district court found did not alter ownership rights.
- EM I (2007) held the Kirchner Decrees did not alter property rights in FRBNY Funds and that funds remained under BCRA, with title presumed to be with BCRA under New York law.
- Plaintiffs later pursued Bancec motions (2006) arguing BCRA was not entitled to a presumption of separateness; the district court granted these motions in 2010, attaching the FRBNY Funds.
- The Second Circuit reverses on several grounds, holding that §1611(b)(1) immunity for central bank property is independent of Bancec separateness and that funds held for central bank use are immunized unless explicitly waived.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does §1611(b)(1) immunity depend on Bancec independence? | Plaintiffs contend independence controls immunity under §1611(b)(1). | Argentina/BCRA argue independence governs only presumption, not immunity, requiring analysis under 1610. | Immunity under §1611(b)(1) does not depend on Bancec independence. |
| What does 'held for its own account' require for central bank property under §1611(b)(1)? | Two interpretations: (a) traditional central banking activities; (b) plain-language ownership in the name of the central bank. | FRBNY urges either plain-language or central banking-activities test; ARGUMENTS converge on ownership in BCRA's name. | Adopts a modified central-bank test: funds in central-bank name presumed immune if used for central banking functions; rebutted if shown not used for central banking functions. |
| Has the Republic's waiver waived BCRA's immunity to FRBNY Funds? | Republic waived immunity for its revenues/assets broadly, including BCRA assets at FRBNY. | Waiver expressly covers the Republic and its revenues/assets, but not BCRA; no explicit waiver for BCRA's FRBNY reserves. | Waiver is not explicit or unambiguous to cover BCRA's FRBNY Funds. |
| Are the Bancec motions barred by claim or issue preclusion? | 1955 motions preclusion should bar re-litigation of the same issues. | Different legal/factual questions in Bancec motions than in EM I; preclusion unlikely. | Not barred by claim preclusion or issue preclusion; Bancec motions address different issues and were not previously decided. |
Key Cases Cited
- First National City Bank v. Banco Para El Comercio Exterior de Cuba, 462 U.S. 611 (1983) (presumption of separateness under Bancec discussed)
- EM Ltd. v. Republic of Argentina, 473 F.3d 463 (2d Cir. 2007) (EM I; central bank immunity and Kirchner Decrees discussed)
- Weltover, Inc. v. Republic of Argentina, 504 U.S. 607 (1992) (central bank/government interactions and commercial activity relevance)
- Dayco Corp. v. Foreign Transactions Corp., 705 F.2d 38 (2d Cir. 1983) (treatment of attachment orders pre-judgment and finality concerns)
- Ali v. Mukasey, 529 F.3d 478 (2d Cir. 2008) (issue preclusion and related principles in second circuit)
- Carpenter v. Republic of Chile, 610 F.3d 776 (2d Cir. 2010) (waiver clarity and scope under FSIA)