15 December 2011 / George Walton

Issue: 7494 / Categories: Features , Constitutional law

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The great escape?

© Copyright LexisNexis 2026. All Rights Reserved.

Is state immunity a “get out of jail” card for sovereign debtors, asks George Walton

The UK Supreme Court gave its landmark decision in July 2011 regarding state immunity in NML Capital Limited (Appellant) v Republic of Argentina (Respondent) [2011] UKSC 31, [2011] All ER (D) 44 (Jul). Unanimously overturning the judgment of the Court of Appeal, the Supreme Court held that Argentina was not entitled to claim state immunity from English proceedings to enforce the judgment of a New York court. The fact that the underlying New York judgment related to bonds issued by a state, in this case Argentina, means that the Supreme Court’s decision is of particular interest and relevance at this time of concern over sovereign debt.

Factual background

In February and July 2000, Argentina conducted a bond issue pursuant to a fiscal agency agreement with Bankers Trust Company (the agreement).

Between June 2001 and September 2003, NML (a Cayman Islands company affiliated to a New York hedge fund) purchased a number of the bonds at a significant discount

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The great escape?

© Copyright LexisNexis 2026. All Rights Reserved.

Is state immunity a “get out of jail” card for sovereign debtors, asks George Walton

The UK Supreme Court gave its landmark decision in July 2011 regarding state immunity in NML Capital Limited (Appellant) v Republic of Argentina (Respondent) [2011] UKSC 31, [2011] All ER (D) 44 (Jul). Unanimously overturning the judgment of the Court of Appeal, the Supreme Court held that Argentina was not entitled to claim state immunity from English proceedings to enforce the judgment of a New York court. The fact that the underlying New York judgment related to bonds issued by a state, in this case Argentina, means that the Supreme Court’s decision is of particular interest and relevance at this time of concern over sovereign debt.

Factual background

In February and July 2000, Argentina conducted a bond issue pursuant to a fiscal agency agreement with Bankers Trust Company (the agreement).

Between June 2001 and September 2003, NML (a Cayman Islands company affiliated to a New York hedge fund) purchased a number of the bonds at a significant discount

If you are not a subscriber, subscribe now to read this content

If you are already a subscriber sign in

...or Register for two weeks' free access to subscriber content

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