PARIS/BUENOS AIRES France will petition the U.S. Supreme Court to review Argentina's case in its decade-old legal battle with certain creditors, French Finance Minister Pierre Moscovici said on Friday, citing the importance of global financial stability.
The South American country, which defaulted on about $100 billion (65 billion pounds) in sovereign debt in 2002, is in a legal fight against holders of defaulted bonds who chose not to go along with restructurings in 2005 and 2010. Some 93 percent of holders accepted returns as low as 25 cents on the dollar.
But bondholders who did not participate in those debt swaps have sought full repayment of 100 cents on the dollar.
"France will intervene as a friend of the court to the Supreme Court in this matter," Moscovici said in a statement released late on Friday.
"France's move aims to alert the Supreme Court to the potential implications of its decision on the sound functioning of the international financial system," he said.
No comment was immediately available from the Argentine government.
The deadline for filing such a brief is midnight Friday EDT (0400 GMT Saturday) and Moscovici did not specify when exactly it would be filed.
The U.S. Supreme Court is on its summer break and would not decide whether to hear the Argentina case until the fall.
Some governments and the International Monetary Fund say they are concerned that a ruling against Argentina would make it more difficult for other countries to restructure their debt.
Moscovici said such a decision could complicate the debt restructurings undertaken by the Paris Club of creditor nations, for which France holds the presidency.
"This step isn't linked to the specific case of Argentina," Moscovici said. "It is motivated by France's attachment to the preservation of the international financial stability."
Argentina is asking the Supreme Court to void an October 2012 ruling by the 2nd U.S. Circuit Court of Appeals in New York, which found it had violated a clause in its bond documents requiring it to treat all creditors equally.
The appeals court has not yet ruled on whether to require Argentina to pay the so-called holdout creditors. A ruling in their favour would put Argentina on the hook for more than $1.3 billion in payments and risk of another default.
Argentina says it will not give them better terms than those offered in the two restructurings. President Cristina Fernandez has characterized them as "vultures" for picking over the bones of the country's 2002 sovereign default.
IMF Managing Director Christine Lagarde had planned to recommend that the IMF's board approve a friend-of-court brief in support of the case by the end of this week. Argentine bond prices dropped on Wednesday when the Fund announced it would not make the filing.