Disputable Means: Pragmatic Knowledge Practices in Sovereign Debt Agreements. Reflections on the Argentinian Case

Abstract

This essay follows a recent interest in socio-legal studies in taking on the legal technicalities (e.g., legal instrumentalism, managerialism, procedures, legal technocrats, and the forms of legal doctrines) as a subject of inquiry in its own right (Riles 2005, 2011; Valverde 2003; 2009). In this light, this piece focuses on the means to end relationship embedded in legal techniques to elaborate on the ?pragmatic knowledge practices? (Valverde 2003) they further. The study draws on a concrete case of sovereign debt litigation in US Courts: NML Capital, Ltd. v. Republic of Argentina, which arises out of this country?s foreign debt default in 2001 following a large financial and economic crisis, and is also closely related to its debt restructurings of 2005 and 2010. Rather than focusing on the effects of US court rulings on the parties in the case, third interested parties (namely payment and clearing institutions), or even on the alleged impacts upon the sovereign debt world (Gelpern 2013; 2014), and the policies and practices of international organizations (G 77 plus China, Summit 2014 Declaration; NU General Assembly Resolution, Sept. 9, 2014; G20 Leaders? Communiqué, Brisbane Summit 2014), in this chapter, I take this judicial case as the venue to engage in a context-based analysis of the use of some legal formulas or terms like pari passu which became routinized knowledge practices in foreign debt agreements (Buchheit and Pam 2004; Cohen 2011; Weidemaier Scott and Gulati, 2013; Day, 2014) or allegedly novel clauses like RUFO (Rights-Upon-Future-Offers). In this vein, the essay queries how legal terms of this kind, often deemed as ?boilerplate? clauses (Gulati and Klee 2001), may become a central political and economic issue themselves. The study moves beyond the question of judicial interpretation of contractual terms to offer, instead, a fine-grained analysis of the function these legal devices are thought to perform in the contexts in which they are placed, represented, appropriated, negotiated, and even anticipated by the agents involved in the very act of drafting sovereign debt contracts. In particular, I seek to assess the political spin of legal technicalities by looking into their constitution as mere vehicles of pragmatism while serving a disputable ideological agenda, and how they further an inscription of political possibility through a description of economic inevitability. To do so, I draw on interviews with researchers of Argentinian sovereign debt, and with lawyers and economists that partook in the restructuring and litigation processes, on archival research, on document analysis, and on scholarly work about the genealogy of pari passu, and other academic literature on global financial markets. In stressing the instrumentality of these legal tools and the knowledge relations they expose, ultimately I aim at rendering them as political moves (e.g, Cohen 1927), that is to say, as powerful devices that help shape reality. In other words, they are not simply mere technicalities but profoundly political practices (Riles 2011); thus, as means to multiple ends.