The British Supreme Court has rejected Argentina’s request to appeal the US$1.75 billion lawsuit it lost against four hedge funds over securities linked to Argentina’s 2013 gross domestic product.

Monday’s ruling means Argentina has exhausted its options for appealing the case. The creditors have already claimed the US$337 million the country was made to pay as collateral to be given permission to appeal.

The government is analyzing their next steps, a source at the Treasury Prosecutor’s Office told the Herald.

Aidan O’Rourke, partner at Quinn Emanuel law firm acting for the claimants, said in a statement that “the claimants have always been confident in their case, and are pleased with the Supreme Court’s decision to refuse permission to appeal.”

He added: “Argentina has repeatedly said to the Court that, if a final decision is made in favor of the warrant holders, […] the money to pay its creditors will need to be found. That time has now come,” O’Rourke added.

President Javier Milei blamed the ruling on the manipulation of official statistics at the INDEC data bureau during Cristina Kircher’s presidencies in a post on X. This claim has been widely repeated in Argentine media throughout the trial. The government took over the INDEC in 2007, forging inflation statistics until 2015. However, Judge Simon Picken, who first heard the case, held in his 2023 ruling that he would not consider the hedge funds’ argument that the country had purposely forged its GDP data to avoid paying.

Picken dismissed the argument that Argentina “acted in bad faith” and forged its GDP data in March 2014 to avoid paying up. In reality, the case can be traced back to 2005, when the Néstor Kirchner government summoned creditors to agree new ways to repay the recently-defaulted debt. 

During those negotiations, Argentina offered new securities with a haircut of about 70% of the principal, with a “sweetening clause” that triggered the payment of a coupon if the country grew by between 3% and 3.22%, depending on the year. 

At the time, Argentina used data from a 1993 economic census to calculate its GDP. In 2014, at the request of the International Monetary Fund, Argentina rebased its GDP using data from 2004. However, wording in the contract with the creditors could be interpreted as requiring Argentina to measure its GDP using both censuses, producing two separate indexes until the end of the bond’s lifetime in 2035.

Using a ratio between the newly-calculated index and Argentina’s official projected growth estimates, which relied on old economic data, the funds calculated that a 1.26% increase in the GDP in 2013 would be enough to trigger the payment obligation, instead of the 3.22% the contract originally implied. That year, growth was officially 2.92%. Picken accepted that argument.

On X, Milei also listed the “illegal expropriation” of the YPF company, a case that is still under way in a New York court, as part of the “damage” Kirchner and Buenos Aires Governor Axel Kicillof have done to Argentina.

“‘The illegal expropriation of YPF’. More than one person in New York is waking up happy with this phrase,” said an X post by Sebastián Maril, chief executive of Latam Advisors consultancy, who has been following the case closely.

“This case, known as ‘GDP Coupon,’ has been dragging on since 2013, when the former president’s government modified the way of calculating GDP to avoid making additional payments to bondholders of bonds issued in the debt swaps of 2005 and 2010,” Interior Minister Guillermo Francos wrote on X.

“The ‘creative’ solutions of populism brought negative economic consequences that have tainted the country’s reputation,” he added.

The GDP coupon trial took place in October and November 2022. In April 2023, the High Court issued a judgment against Argentina. In June 2024, the Court of Appeal rejected the country’s appeal and Argentina took the case to the Supreme Court, but was required to pay US$337 million in collateral to do so.

Another lawsuit over GDP-linked coupons is being handled in a New York Federal Court headed by Judge Loretta Preska.