By Lawrence Hurley
WASHINGTON (Reuters) - U.S. Supreme Court justices on Monday indicated that creditors should be able to seek limited information about Argentina's non-U.S. assets in a case about bank subpoenas in decade-long litigation over Argentina's obligations to bond investors.
During a one-hour-long oral argument over hedge fund NML Capital Ltd's efforts to seek payment of court judgments it says are worth around $1.7 billion, several justices suggested that military and diplomatic assets should be off-limits, which would narrow the scope of the ruling.
Depending on how a ruling along those lines is written, it could make it harder for NML to enforce the court judgments it has won. Buenos Aires-based economist Guillermo Nielsen, Argentina's finance secretary from 2002 to 2005, indicated that the government has few commercial assets around the world.
"There is effectively nothing," he said.
A separate and more high-profile case, in which Argentina is challenging a court judgment ordering it to pay $1.33 billion to NML and other so-called holdout bond investors or face a potential default if it refuses to do so, is also pending before the high court.
During Monday's argument, the nine justices gave no indication of where they stand on the bigger case. At one point, Chief Justice John Roberts made it clear to NML's lawyer, Theodore Olson, that the broader history of the litigation has no bearing on how the court will rule.
"It seems to me that context is totally irrelevant," Roberts said. "It doesn't matter what the basis of the underlying judgment is."
The narrow legal question is whether NML, a unit of billionaire hedge fund manager Paul Singer's Elliott Management Corp, could enforce subpoenas against Bank of America and Banco de la Nacion Argentina.
The South American country defaulted on its debt in 2002 and has been in a legal battle with bondholders led by hedge funds NML and Aurelius Capital Management, which rejected two debt restructuring offers. Argentina argues the funds bought most of the debt at a deep discount after the default and sought to thwart the country's efforts to restructure.
Argentina faces falling dollar reserves, a weak economy and high inflation, which has prompted President Cristina Fernandez to reverse some of her more populist policies.
While the majority of justices seemed sympathetic to the idea of NML being able to seek information, several signaled a willingness to limit it to commercial assets.
Roberts described what NML was seeking as "pretty extraordinary" because it could lead to creditors finding out "how many jet fighters Argentina happens to have."
Probing further on the question of what assets creditors could seek information on, Justice Stephen Breyer playfully cited "marvelous Argentine beef" in a butcher's shop in Italy as an example of the type of commercial property that NML could pursue.
Justice Antonin Scalia appeared most hostile to Argentina. He questioned why other nations that could benefit from a ruling in Argentina's favor had not filed court papers in support.
"Maybe Argentina owes them money as well," he said, prompting laughter in the courtroom.
Justice Ruth Bader Ginsburg seemed more sympathetic to Argentina's position. She made reference to creditors who had held about 93 percent of Argentina's bonds and agreed to the 2005 and 2010 debt swaps, accepting between 25 cents and 29 cents on the dollar.
A ruling is due by the end of June.
The case is Argentina v. NML Capital, U.S. Supreme Court, 12-842
(Additional reporting by Hugh Bronstein in Buenos Aires; Editing by Will Dunham and Grant McCool)