Novoriver S.A. v. Argentine Republic, 1:19-cv-09786

Background

Plaintiffs are sophisticated hedge funds suing the Republic of Argentina for alleged breach of GDP-linked securities issued in 2005 and 2010; Plaintiffs seek hundreds of millions though the securities have paid nearly $10 billion to date.
Argentina filed a discovery letter requesting a conference because Plaintiffs have largely refused to respond to Defendants’ interrogatories and document requests beyond minimal ownership proof and publicly available materials.
Defendants seek documents and interrogatory responses about (a) acquisition, financing, assignments and ownership of the Securities; (b) Plaintiffs’ reasons for acquiring the Securities; and (c) Plaintiffs’ and third parties’ analyses and understanding of the Securities’ terms and payment mechanics.
Argentina contends the sought discovery is relevant to standing, timeliness, champerty, breach of the implied covenant of good faith and fair dealing, and mutual mistake.
Plaintiffs have obtained extensive documents from Argentina and served broad third-party subpoenas (e.g., financial institutions and Cleary Gottlieb) indicating they view drafting/issuance materials as relevant.
Procedural posture: letter to Judge Preska requesting a pre-motion discovery conference (conference set for November 9, 2021) or leave to move to compel; no substantive court ruling on the discovery disputes in the letter.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Plaintiffs must produce non-public documents about acquisition/ownership	Plaintiffs: only ownership proof (from filing date forward) and public materials are relevant; decline broader production	Argentina: acquisition, financing, assignments, and purchaser identities are essential to standing and damages and must be produced	No ruling yet — discovery conference scheduled; court has not decided production scope
Discovery on champerty (whether Securities were acquired to bring suit)	Plaintiffs: resist producing financing, ownership structure, and motive documents	Argentina: NY Judiciary Law §489 defense requires discovery into Plaintiffs’ purpose for acquiring Securities	No ruling yet — Argentina requests permission to move to compel discovery on champerty
Discovery into Plaintiffs’ understanding of Securities’ terms (re implied covenant)	Plaintiffs: narrow production only; argue much is public or irrelevant	Argentina: Plaintiffs’ expectations, projections, and analyses are directly relevant to implied covenant and to rebut Plaintiffs’ reading of the GDP trigger	No ruling yet — conference to address scope; Argentina stresses factual nature of claim
Discovery relevant to mutual mistake defense and timeliness	Plaintiffs: limited production; one plaintiff amended complaint admitting most purchases occurred after suit filing	Argentina: Plaintiff knowledge, projections, and purchase timing relevant to mutual mistake and statute of limitations	No ruling yet — Argentina has identified documents it seeks; court to consider at conference

Key Cases Cited

AIG Mexico Seguros Interamericana, S.A. de C.V. v. M/V Zapoteca, 844 F. Supp. 2d 440 (S.D.N.Y. 2012) (criticizing one-sided discovery requests)
Tractebel Energy Mktg., Inc. v. AEP Power Mktg., Inc., 487 F.3d 89 (2d Cir. 2007) (court must consider course of performance and dealings when assessing implied covenant claims)
Elliott Assocs., L.P. v. Rep. of Peru, 948 F. Supp. 1203 (S.D.N.Y. 1996) (defendants entitled to discovery on champerty allegations)
Second Source Funding, LLC v. Yellowstone Cap., LLC, 40 N.Y.S.3d 410 (App. Div. 2016) (elements required to prove breach of contract include formation, performance, breach, causation, and damages)
ACA Galleries, Inc. v. Kinney, 928 F. Supp. 2d 699 (S.D.N.Y. 2013) (mutual mistake requires showing a mutual, material mistake at contract formation)
Invs. Ins. Co. of Am. v. Dorinco Reinsurance Co., 917 F.2d 100 (2d Cir. 1990) (parol evidence admissible to establish mutual mistake)