Why the government's pari passu litigation is no
The present Argentine sovereign debt crisis results from the
pari passu clause in the 1994 Argentine Fiscal Agency
Agreement (FAA). The meaning of that pari passu clause
was litigated in the US District Court for the Southern
District of New York, and the Second Circuit Court of Appeals.
The US Supreme Court declined to consider an appeal by the
Republic of Argentina.
A conventional pari passu clause typically consists
of one sentence, two common examples of which being:
The obligations of the Borrower rank, and will rank, pari
passu in right of payment with all other present and future
unsecured and unsubordinated External Indebtedness of the
Borrower; or All of the obligations and liabilities of the
Borrower hereunder rank, and will...