Argentina's President Cristina Fernandez de Kirchner speaks during a ceremony at the governmemt house in Buenos Aires on July 31, 2014
The Hague (AFP) - Argentina sought Thursday to haul the United States before the UN's highest court, accusing Washington of breaching its sovereignty after a US judge blocked it from servicing its restructured debt.
The Argentine government is battling to exit its second default in 13 years after New York District Judge Thomas Griesa froze its June debt payment of $539 million in a US bank.
Griesa's ruling stipulated that the country could not repay those bondholders who had agreed to massive write-downs without also paying two "holdout" creditors the full amount owed them.
The ruling has incensed the Argentine government, which has condemned the judge as biased and appealed to the United States government to intervene.
It took the standoff a notch higher on Thursday by lodging a suit agaisnt the United States at the International Court of Justice (ICJ) in The Hague, saying the country had violated its "sovereign decision" to restructure its debt after its 2001 economic crisis.
"Given that a state is responsible for the conduct of all the branches of its government, these violations have generated a controversy between the Republic of Argentina and the United States, which our country submits to the ICJ for resolution," President Cristina Kirchner's office said in a statement.
But the ICJ said it would not take any action "unless and until the United States of America consents to the court's jurisdiction" -- far from a foregone conclusion given that the US withdrew from the court's general jurisdiction in 1986.
Argentina's messy New York court battle has reopened the accounting morass that followed its 2001 economic collapse, when it defaulted on more than $100 billion in debt amid a crisis it is still battling back from.
The dispute pits the Argentine government against two American hedge funds, NML Capital and Aurelius Capital Management, which bought up Argentine bonds for pennies on the dollar after the 2001 default and sued for full payment.
Argentina says paying the hedge funds -- which it calls "vulture funds" -- the entire $1.3 billion it owes them could trigger legal claims for equal treatment by creditors who had agreed to a 70-percent write-down in deals reached in 2005 and 2010.
- New York hearing Friday -
After Buenos Aires announced it was suing at the ICJ, Judge Griesa called a new hearing in the case for Friday to address "recent statements made by the Republic of Argentina."
Argentina, meanwhile, said the Bank of New York Mellon, where its overdue debt payment of $539 million is frozen, was breaching its contract by obeying the judge's ruling.
The Argentine government took out an advertisement in national newspapers Thursday urging the 92 percent of creditors who have agreed to restructure the country's debt to choose another bank to disburse their payments.
"We remind bondholders that there are various rights -- and consequent legal remedies -- at their disposal... in the event that the fiduciary trustee fails to fulfill its obligations," it said.
It is possible "to remove the fiduciary trustee from its position at any time and designate a successor," it added.
Argentine Economy Minister Axel Kicillof -- who flew to New York last week in a failed bid to resolve the impasse on the eve of Argentina's default -- meanwhile renewed his criticism of Griesa.
"A judge in one jurisdiction can't be allowed to block the debt payments of an entire country," he said. "There's something called sovereignty."