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Palladian Partners LP & Ors v The Republic of Argentina & Anor

[2024] EWCA Civ 139
Argentina lost a big case and has to pay a lot of money. It wants to appeal, but the court made it pay some of the money upfront because Argentina has a history of not paying its debts. The court said this is fair to protect the winners and prevent delays.

Key Facts

  • Palladian Partners L.P. and others (Respondents) obtained declarations and monetary judgment against the Republic of Argentina (Appellant) concerning GDP-linked securities.
  • The Judge ordered the Republic to pay EUR1,329,760,063.39 plus interest.
  • The Republic was granted permission to appeal, subject to a condition to pay EUR309,876,449.80 into escrow.
  • The Republic challenged the condition, arguing administrative error and the dire state of Argentina's economy.
  • The Court of Appeal considered whether there was a “compelling reason” to impose the condition, referencing previous case law (CPR 52.6(2)(b), CPR 52.18(1)(c), CPR 52.18(2), Hammond Suddard, Days Medical Aids, Sunico, Dumford Trading, and Infrastructure Services).

Legal Principles

An order giving permission to appeal may be made subject to conditions (CPR 52.6(2)(b)).

CPR 52.6(2)(b)

The appeal court may impose or vary conditions on an appeal (CPR 52.18(1)(c)), but only where there is a “compelling reason” (CPR 52.18(2)).

CPR 52.18(1)(c), CPR 52.18(2)

The “compelling reason” test reflects that conditioning permission to pay a judgment debt is unusual. The existence of a compelling reason is necessary but not sufficient; the imposition remains a matter of discretion.

Hammond Suddard, Days Medical Aids, Sunico, Dumford Trading, Infrastructure Services

Factors indicating a compelling reason for a condition include difficulties of enforcement in a foreign jurisdiction, insufficient evidence of the appellant's inability to pay, inadequate financial disclosure, and deliberate non-compliance with prior orders.

Sunico [25]

A factor weighing against imposing a condition is if it would stifle the appeal.

Sunico [26]

Outcomes

The Court of Appeal upheld the condition requiring the Republic to pay EUR309,876,449.80 into escrow.

The Court found a compelling reason based on Argentina's history of defaulting on debts, difficulties in enforcing judgments against it, and the risk that the appeal was primarily for delay. The Court considered previous defaults, enforcement challenges, and post-judgment statements by officials.

The deadline for compliance with the condition was extended to 5 April 2024.

To allow sufficient time before the appeal hearing.

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