Originally from American Review of International Arbitration - ARIA

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I. INTRODUCTION
At the end of 2001, while in the midst of a profound economic crisis, the
government of Argentina declared a moratorium on service of its outstanding
debt. As the country emerged from the crisis four years later, the Argentine
government offered to exchange the defaulted debt for new debt instruments
paying approximately 35 cents on the dollar.1 In March 2005, the government
announced that 76 percent of its creditors had accepted the exchange offer,
effectively restructuring over U.S. $100 billion in bond debt.2 Although the high
degree of participation in the restructuring was hailed as a victory for Argentina,
the amount of outstanding debt held by those creditors who rejected the offer –
U.S. $25 billion3 – is huge.
The creditors that rejected Argentina’s exchange offer – the so-called “hold
out” creditors – have tried unsuccessfully to enforce Argentina’s obligations under
the defaulted debt instruments. Although judgments have been obtained in some
cases,4 creditors have encountered great difficulty finding attachable assets of the
Argentine government with which to enforce the judgments. As Anna Gelpern
described the situation in 2005, litigation by hold-out creditors against Argentina
“ha[s] yet to yield a penny.”5
In September 2006, a group of 195,000 Italian holders of Argentine defaulted
debt submitted a request for arbitration to the International Centre for Settlement