NEW YORK (Reuters) - Holders of euro-denominated Argentine bonds plan to appeal a U.S. judge's ruling blocking the country from making payments on their debt, according to a court filing on Friday.
In a notice filed in Manhattan federal court, lawyers for the bondholders challenged an Aug. 6 ruling from U.S. District Judge Thomas Griesa that Argentina cannot pay the bondholders until it also pays holdout investors who refused to restructure their debt in the wake of Argentina's 2001-2002 default.
Meanwhile, Citigroup Inc and Argentina on Friday were granted an expedited appeal of another order from Griesa that barred future payments to holders of certain U.S. dollar-denominated restructured bonds, after the judge allowed the bank to make a one-time payment.
Both appeals will be considered by the 2nd U.S. Circuit Court of Appeals in New York. The court on Friday set oral arguments in the Citibank matter for Sept. 18.
Argentina defaulted after missing a July 30 deadline for payments on restructured bonds. Officials have claimed the country fulfilled its obligations but was blocked by Griesa, whom they have criticized, saying he overstepped his authority.
In June, Argentina deposited $539 million in Bank of New York Mellon Corp's account at the Central Bank of Argentina, earmarked for bondholders who participated in sovereign debt exchanges in 2005 and 2010. It also deposited funds with Citibank Argentina.
But Griesa blocked the payments, saying Argentina's actions were an "illegal" violation of his prior orders.
The euro bondholders have argued that their bonds should be exempt because they are governed by the laws of England and Wales and paid through foreign banking institutions.
"At no point in the euro bonds' payment chain do funds comprise U.S. dollars, enter the U.S., or flow through U.S. entities," lawyers for the bondholders argued in a previous court filing in June.
Separately, in July, Griesa permitted Citibank to pay some bondholders because the bank indicated it was unable to differentiate between dollar-denominated exchange bonds and bonds issued as part of a settlement between Argentina and Repsol SA, which are not part of the bond dispute.
He said he would not allow a second payment and ordered the bank to figure out a way to tell the difference, prompting Argentina and Citibank to appeal.
Last week, Griesa threatened a contempt order if the country did not stop issuing "false and misleading" statements, but Argentine officials have continued to defy him. On Wednesday they accused him of not understanding the case's complexities.
In 2012, Griesa ordered Argentina to pay $1.33 billion plus interest to the holdout group, led by Elliott Management's NML Capital Ltd and Aurelius Capital Management.
Aurelius declined to comment on the latest development in the long-running proceedings. A representative for NML was not immediately available to comment.
(Reporting by Joseph Ax and Daniel Bases; Editing by David Gregorio)