1. Republic of Argentina v. Weltover 2014-05-07 Songhyun Lee(132sis55)

2. Facts ArgentinaFederal Bank Weltover & TwoPanamanian Cor. FEIC (Foreign Exchange Insurance Contract) Bonods U.S dollars

3. Plaintiffs Defendents Welt over and two Panamanian corporation Refused to accept the rescheduling Insisted on full payment Specifying New York as the place where payment should be made Argentina Refused to pay full payment Dismissed for lack of subject matter jurisdiction, lack of personal jurisdiction Facts

4. Issue  Whether Argentina’s unilateral rescheduling of the Bonods had a “direct effect” in the United States

5. Rule  The general rule is “Foreign Sovereign Immunities Act of 1976” as the basis for jurisdiction

6. Analysis We can sue Argentina in U.S. Court based on “Foreign Sovereign Immunities Act of 1976” The “direct effect” requirement cannot be satisfied where the plaintiffs are all foreign corporations with no other connections to the United States. Finding of jurisdiction would violate the Due Process Clause of the Fifth Amendment Plaintiffs Dependents

7. Analysis Foreign Sovereign Immunities Act of 1976  “a foreign plaintiff to sue a foreign sovereign in the courts of the United States, provided the substantive requirements of the Act are satisfied” 1. Those exceptions include actions in which the foreign state has explicitly or impliedly waived its immunity 2. Actions based upon commercial activities of the foreign sovereign carried on in the US or causing a direct affection the US.

8.  Respondents had their accounts in New York as the place of payment  Argentina made some interest payments into those accounts  Money was supposed to be delivered to a NY bank and it was not forthcoming, so the United States was directly involved Analysis

9.  To prove the Due Process Clause of the Fifth Amendment, ‘direct effect’ involved ‘minimum contacts’ which satisfy the constitutional test  By issuing debt instrument in U.S. dollars and payable in N.Y and by appointing financial agent in N.Y, it is “purposefully availed itself of the privilege of conducting activities within the United States”  Argentina’s change in the maturity dates of the bonds was “commercial activity” that had a direct effect in the U.S

10. Conclusion  Yes, Republic of Argentina’s issuance of the Bonds and its rescheduling of the maturity dates on those instruments had a direct effect in the United Sates.

11. Discussion  Does Argentina’s government bond ‘Bonods’ have a purpose of ‘commercial activity’?  Does rescheduling of the maturity date has actual effect to U.S?

12. Thank You!