Republic of Argentina v. Weltover, Inc.
Supreme Court
504 U.S. 607 (1992)
Argentina and its central bank (Argentina) (defendants) created a foreign exchange insurance program in 1981 to assume currency-depreciation risk for Argentine borrowers in cross-border deals, but ran out of dollars to cover the program's obligations in 1982 and refinanced by issuing government bonds to foreign creditors, who could accept the government as a substitute debtor or guarantor. When those bonds matured in 1986 and Argentina still lacked sufficient foreign currency, it unilaterally extended the payment deadline and offered substitute instruments. Weltover, Inc. and two other bondholders (plaintiffs) refused the rescheduling, demanded full payment in New York, and sued Argentina in federal court under the Foreign Sovereign Immunity Act (FSIA) after Argentina failed to pay; Argentina moved to dismiss for lack of jurisdiction.
Whether the FSIA provides a commercial exception to sovereign immunity for conduct by a foreign state performed not as a regulator of a market, but as a private player within it.