On 29 and 30 November 2012, the International Tribunal for the Law of the Sea (ITLOS) heard an application by Argentina for provisional measures against Ghana under Article 290(5) of the UN Convention on the Law of the Sea (UNCLOS). The application is regarding Ghana’s continued detention of the Argentine warship, the ARA Libertad. The ITLOS action is the latest instalment in Argentina’s long-running battle with a number of holdout bondholders who are pursuing Argentine state assets around the globe in a bid to recoup their substantial losses following Argentina’s default on US$80 billion of public debt in 2001.
The vessel was detained in the Ghanaian port of Tema on 2 October 2012 when one of Argentina’s creditors, NML Capital, successfully obtained an injunction detaining the vessel from the Ghanaian High Court in Accra. A subsequent challenge to the injunction by the Argentine government on the grounds of state immunity was unsuccessful (which we covered here). Argentina has since filed an appeal against that decision with the Ghanaian Court of Appeal, which is expected to be heard in January 2013. NML Capital is owed just under US$300 million by Argentina, and has sought to enforce judgments handed down in its favour by the US courts against Argentine state assets around the globe.
On 29 October 2012, Argentina commenced arbitration proceedings against Ghana under Annex VII of UNCLOS, which provides for the resolution of disputes arising in connection with the interpretation and application of UNCLOS by a five-member panel appointed by agreement of the parties. Argentina claims that the continued detention of the frigate by Ghana is a violation of Article 32 of UNCLOS on the immunity of warships and also of Articles 18(1)(b), 87 and 90, which deal with the right of innocent passage in territorial waters and freedom of navigation on the high seas. In its application for provisional measures in respect of those proceedings, filed on 14 November 2012, Argentina requested that ITLOS order interim relief pending the constitution of the Annex VII tribunal. Argentina is seeking an order requiring Ghana unconditionally to release the ship from the port in Tema and from its territorial waters, and to resupply the vessel to that end.
In order to obtain provisional measures, Argentina must show that (i) the Annex VII tribunal, once constituted, will have prima facie jurisdiction over the dispute; (ii) the measures would be necessary and appropriate to protect the rights of the parties; and (iii) the urgency of the situation justifies the granting of such measures before the Annex VII tribunal is constituted. Also at issue is the scope of the waiver of immunity provisions in the bonds. Ghana has submitted that the proceedings before the Ghanaian courts should be allowed to run their course.
The referral to ITLOS will almost certainly raise the political stakes in this dispute even further now that it is an inter-state dispute before an international tribunal. The Tribunal is working to a tight timetable and is expected to hand down a decision on the provisional measures application on 15 December 2012. Meanwhile, Argentina’s challenge before the Ghanaian Court of Appeal is expected to be heard in January 2013, though that appeal may now be expedited.