Ghana court rules Argentine naval ship seizure was legal

Thu Oct 11, 2012 10:01am EDT

* Court dismisses Argentine's immunity claims

* Creditors seeking bond guarantee worth $20 million to release vessel

By Kwasi Kpodo

ACCRA, Oct 11 (Reuters) - A court in Ghana upheld as legal on Thursday the detention of an Argentine naval vessel seized under a court order by creditors pursuing the South American nation over its 2002 debt default.

Argentina declared a sovereign default a decade ago and now faces a raft of lawsuits in U.S. courts by bondholders seeking state asset freezes to recover the value of defaulted bonds.

The Libertad, a navy frigate with 200 crew, was detained in Ghana's eastern port of Tema on Oct. 2 under a court order sought by NML Capital Ltd, an affiliate of the investment firm Elliott Management.

Argentina's defence ministry filed a motion contesting the detention claiming sovereign immunity. It said that, due to its military nature, the vessel could not be targeted by creditors.

In its ruling the commercial court in Ghana's capital Accra said Argentina had forfeited such immunities when it issued the bonds.

"The defence applicant had made it so clear in the transaction agreement that it was waving such immunity and it is my view that the action being sought by the plaintiff is binding in accordance with the laws," the judge said in a statement.

Ace Ankomah, a lawyer for NML Capital, told Reuters his clients were seeking a bond deposit worth at least $20 million before releasing the vessel. Argentina owed his clients "well over $300 million", he said.

"We are not insisting on cash payment, neither are we asking for the full amount. Our position is that we'd release the vessel if they are able to get a bank to issue the bond to us," Ankomah said.

Bondholders like NML Capital, which the left-leaning government of President Cristina Fernandez calls vulture funds, normally target foreign bank accounts held by state-run companies or government agencies.

Defence lawyers said the ship, which is used as a training vessel, was running low on fuel and appealed to the court to allow refuelling to provide power for the crew, all of whom remain aboard.

The Libertad was visiting Ghana as part of a west African tour. It is due to sail to Angola next.

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