Republic of Argentina and Banco Central De La Republica Argentina v. Weltover, Inc., et al. (504 U.S. 607)
U.S. Supreme Court · decided June 12, 1992 · Supreme Court Database (Spaeth)
- Citation
- 504 U.S. 607 · 112 S. Ct. 2160
- Decided
- June 12, 1992
- Term
- October Term 1991
- Vote
- 9–0
- Majority author
- Justice Scalia
- Issue area
- Judicial Power
- Disposition
- Affirmed
- Outcome
- Petitioning party lost
- Ideological direction
- Liberal
Opinion excerpt
Justice Scalia delivered the opinion of the Court. This case requires us to decide whether the Republic of Argentina’s default on certain bonds issued as part of a plan to stabilize its currency was an act taken “in connection with a commercial activity” that had a “direct effect in the United States” so as to subject Argentina to suit in an American court under the Foreign Sovereign Immunities Act of 1976, 28 U. S. C. § 1602 et seq. I Since Argentina’s currency is not one of the mediums of exchange accepted on the international market, Argentine businesses engaging in foreign transactions must pay in United States dollars or some other internationally accepted currency. In the recent past, it was difficult for Argentine borrowers to obtain such funds, principally because of the instability of the Argentine currency. To address these problems, petitioners, the Republic of Argentina and its central bank, Banco Central (collectively Argentina), in 1981 instituted a foreign exchange insurance contract program (FEIC), under which Argentina effectively agreed to assume the risk of currency depreciation in cross-border transactions involving Argentine borrowers. This was accomplished by Argentina’s agreeing to sell to domestic borrowers, in exchange for a contractually predetermined amount of local currency, the necessary United States dollars to repay their foreign debts when they…
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