Argentina’s debt tango

Beatrice MurchHere is my latest column for IBA Global Insight:

The threat of default has loomed large again for Argentina in recent months. It went right down to the wire on 30 July when it became clear that a deal wasn’t going to be reached. For the eighth time in its history the country slipped grudgingly into default, making it one of the world’s most recidivist sovereign defaulters.

First, some context: The payment problems this time stem from Argentina’s mega-default in late 2001 when the country defaulted on $95bn in government bonds. Holders of around 92 per cent of those bonds accepted restructurings worth about $0.30 on the dollar, but the remaining bondholders – a group of US-based hedge funds led by billionaire Paul Singer’s Elliott Management – refused to accept the restructuring, demanded payment in full for old bonds that weren’t exchanged and sued for full payment.

A decade-long legal battle ensued and in July President Cristina Fernández de Kirchner’s government refused to abide by the decisions of the US courts and pay the holdouts, effectively locking Argentina out of the global capital markets altogether. Thus it was with good reason that tensions were high on 30 July as the culmination of the lengthy dispute saw US District Court Judge Thomas Griesa side with the hedge funds and duly freeze a $539m interest payment from Argentina, ordering the country not to make any payments on new bonds before it paid for its previous payments, plus interest.

Published on 06-10-14. Read on here

France’s warship volte-face raises legal questions

David MonniauxHere is my latest piece published on the IBA Global Insight newsfeed:

As Western sanctions against Russia stepped up a further gear last week, a contractual dispute brewing between France and Russia threatens to have legal and economic ramifications.

It all started back in 2011 when Russia commissioned France to build two Mistral navy assault ships (bâtiment de projection et de commandement, or BPCs) for a cost of €1.2 billion. However, in recent months France’s participation in the venture has been brought under increasing scrutiny amid growing tensions over Russia’s continued involvement in the unrest in eastern Ukraine.

The French government initially resisted pressure to halt the delivery, saying it would respect the existing contract.

Despite this unwillingness to budge, the mood suddenly changed on the eve of the NATO summit in Wales on 3 September, when France announced it would suspend delivery of the two ships due to concerns over the ongoing unrest, saying in a statement:

‘The recent actions of Russia in the east of Ukraine violate basic security in Europe. The President…has found that, despite the prospect of a ceasefire, which has yet to be confirmed and implemented, the conditions for France to authorise the delivery of the first BPCs are not in place.’

Published on 19-09-14. Read on here

Better together? Ukraine and Russia’s contrasting trade alliances

Ukraine Photo Ivan BanduraHere is my latest column for IBA Global Insight:

After months that have seen widespread demonstrations, bloodshed, Russia’s annexation of Crimea, snap elections and ongoing turmoil in Ukraine, it is easy to forget that it was the decision by former President Viktor Yanukovych to pull out of a much-anticipated trade pact with the European Union that sparked the protests in the first place.

Wind on nine months and the EU has signed an association agreement with Ukraine, Georgia and Moldova. Russia has also forged ahead with expanding its own trade relationships and signed the Eurasian Economic Union (EaEU) with Belarus and Kazakhstan. As the fallout from the tragic downing of flight MH17 over Ukraine on 17 July continues and relations across the EU and beyond become increasingly strained, the question remains: is it always better, together?

Lourdes Catrain, Vice-Chair of the IBA International Trade and Customs Law Committee and director of Hogan Lovells’ European international trade and investment group, believes the June association agreement signed between the EU and Ukraine is a significant step for European trade relations. ‘It’s important to remember that it was the proposed Ukrainian association agreement with the EU that triggered the Russia-Ukraine crisis, and which shows that Ukraine has made a strong bet for the EU,’ she says.

‘The association agreement with the EU shows that at least, a very large part of the population in Ukraine is prepared to follow the EU. Given the size of Ukraine that’s an important message. [Although] Georgia and Moldova have much smaller economies, it’s significant that the three of them have joined what could become a very deep association with the EU.’

Published on 04-08-14. Read on here

Five key takeaways on Russia’s relations with the West

Here’s my latest blog for Huffington Post UK:

After months of fraught relations between Russia and the West which have seen a flurry of tit-for-tat sanctions triggered by the growing unrest in Ukraine, the final straw seemed to come with the suspected downing on 17 July of flight MH17 over Ukraine by pro-Russian separatists.

Under growing international pressure to act, on 29 July the EU finally confirmed it was imposing ‘stage three’ sanctions against Russia. Here are the five key takeaways on Russian relations with the West in recent weeks:

1. Press reaction to MH17 disaster – differing views

Many of the European, American and Asian newspapers led with the story:

Guardian front pageAlthough as UK broadsheet The Guardian was quick to point out, many Russian newspapers relegated news of the accident to the bottom of the page:

Rossiskaya GazetaAlthough pro-Kremlin Russian tabloid Tvoi Den did lead with a more dramatic image, the caption told a startlingly different story: Donetsk People’s Republic Authorities Claim Plane Destroyed by a Ukrainian Buk Missile:

Tvoi Den front pageReflecting the shockwaves felt across the Netherlands, which suffered the most losses, Dutch daily nrc•next was noticeably more reserved: Last night in eastern Ukraine, a plane crashed. On board were 300 people, 154 of them were Dutch:

nrc.nextPublished on 01-08-14. Read on here

Crises highlight energy dependency concerns

Natural gas pipeline Photo Harald HoyerHere is my latest column published in IBA Global Insight:

The current turmoil in Ukraine continues to dominate the headlines in Europe, but the ripple effect has been felt much further afield. ‘The crisis in Ukraine has once again shown a close correlation between extreme political volatility and energy markets,’ says Pablo Alliani, Chair of the IBA Section on Energy, Environment, Natural Resources and Infrastructure Law and senior partner at Alliani & Bruzzon Abogados in Argentina. ‘Globalisation has interconnected the energy markets in such a manner that a crisis of this sort in any part of the globe will affect the whole world, regardless of any distance.’

For Alliani, there is cause for concern much closer to home: in Venezuela, where civil unrest and political demonstrations continue. ‘Venezuela’s role as one of the region’s leading oil producers means that a crisis in the country would have regional and international ramifications if the oil flow were disrupted,’ he says.

Although protests have been concentrated in the country’s main cities, far away from key production centres such as the Orinoco Belt, Lake Maracaibo and Monagas, the disorder threatens to destabilise the global energy market further. ‘In this respect,’ Alliani adds, ‘even if the oil industry remained insulated, prolonged unrest could severely affect Venezuela’s economy, with major consequences for its key trading partners.’

Published on 06-06-14. Read on here