Obligations Established In Foreign Currency And Their Payment In Legal Tender

Author:Mr Juan Diehl Moreno and Maria del Rocio Beccar Varela
Profession:Marval O'Farrell & Mairal

A ruling issued by the Commercial Court of Appeals (i) revoked a decision of the lower court which had rejected the payment with Argentine Pesos of an amount owed in US Dollars which had considered that article 765 of the Civil and Commercial Code was inapplicable and (ii) considered that defining the legal framework of obligations in foreign currency and determining whether article 765 of the Civil and Commercial Code is of public order or of a non-mandatory nature was not essential to decide the case.

On May 17, 2016, Division F of the National Court of Appeals in Commercial Matters (hereinafter, the "Higher Court"), revoked the ruling issued in judicial proceedings "Unipox S.A. vs Plastilit S.A. in re Ordinary" which had rejected the payment made by the defendant by depositing a sum in Argentine Pesos, alleging its equivalence with the US Dollar amount of the judgment, according to the quotation of the currency on the date of payment.

The Higher Court began by pointing out that according to caselaw of the Supreme Court which it quotes, rulings must be issued in accordance with the current circumstances of the case where verification can be carried out even when not requested by the parties.

Thus, the Higher Court referred to the legal context in force at the time of the payment and made it clear that subsequent regulatory amendments did not need to be considered for the analysis of the case.

In this perspective, the Higher Court considered that "(...) it is not essential to define the legal framework around the obligations in foreign currency - which would lead to determining as logical prius if article 765 of the Civil and Commercial Code is of public order or of a supplementary nature, in view of the distinction which article 7 of the Civil and Commercial Code encourages (...)".

Accordingly, the regulatory context taken into account by the Higher Court was exclusively that of the foreign exchange policy existing at the time when the respondent made the payment. In this framework, it explained that the Central Bank had issued Communiqué "A" 5,318 limiting access to the foreign exchange market as from July 6, 2012, only validating it by reason of tourism and travel, and Communiqué "A" 5,526 dated January 27, 2014, which reduced such restriction enabling the purchase of foreign currency for accumulation in a restricted manner.

Under such circumstantial situation which the Higher Court noted as beyond the control of the parties and while...

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