High Court to rule on Nauru claim The Australian on Google Play Newsstand LEO SHANAHAN3 hours ago THE US hedge fund pursuing the Republic of Nauru for millions of dollars owed in bonds will take the fight to the Australian High Court in a move that could still bankrupt the island nation. American hedge fund Firebird is claiming Nauru still owes $31 million from bonds the tiny nation issued on the Japanese stock exchange in the late 1980s. Previously, Firebird succeeded in having Nauru’s national accounts frozen, bringing the country to a halt. Nauru’s Finance Minister has warned Australian asylum-seeker processing centres on the island could be put at risk — including power and food supplies and medical treatment to the centres which hold around 1200 asylum seekers. Around $14m in Nauruan government funds are still the subject of a freezing order by the court. Several accounts holding aid funding were unfrozen late last year following a decision by the NSW Court of Appeal, which found a previous Japanese judgment in favour of Firebird could not be registered in Australia because Nauru’s bonds fell under what is called the “foreign state immunity” — meaning the funds for operation of the state were off limits for the court. But in a move that may allow Firebird access to at least some of Nauru’s sovereign funds, the hedge fund has dropped claims over funds in a series of aid accounts held by Nauru totalling $15.8m. The excluded accounts include $11.9m in AusAID funding from the Australian government and another $1.9m in aid from New Zealand, as well as aid from the World Health Organisation. Firebird is still seeking around $17m of funds in Nauruan government accounts, most of which are still frozen as a result of court action. This includes $8.3m in a treasury account and a $5m term deposit. If the High Court found in favour of Firebird and ordered Nauru to pay it could wipe out the operating funds of the island nation and leave only aid money in the bank. The government bonds were issued on the Japanese stock exchange in the late 1980s. A series of Japanese banks offloaded the debt when Nauru defaulted. The bonds were later onsold in the mid-1990s to Firebird. With both issuer and guarantors defaulting, Firebird sued the government of Nauru in a Japanese court in 2011, eventually getting an order for a payout of $15m plus interest. In 2012, the NSW Supreme Court initially recognised the Japanese judgment and ordered Nauru to pay the amount owed. That has blown out to $31m with interest accruing since 1994. The High Court will hear the application by Firebird on February 13 in Sydney.
Posted on: Fri, 23 Jan 2015 06:48:31 +0000
Trending Topics
Recently Viewed Topics
© 2015