Cancelation of a Debt Denominated in US Dollars

On February 19, 2015 the Tribunal C of the Civil and Commercial Federal Court of Appeals rejected the appeal filed by Mr. Facundo Garreton against Mr. Alcides Torres by which the claimant proposed cancelling a debt denominated in US Dollars with legal tender (Argentine pesos).

The claimant had acquired a stock broking company from the defendant. As consideration the parties agreed a on a price to be paid in US Dollars, payable in installments. One of the decisive factors in the final judgment was the contract clause by means of which the claimant stated that he knew the scope of the obligation he was assuming. Such clause made the Judges presume that the claimant had the necessary means to access the funds, in particular, considering his extensive experience in financial matters.

The judgment argues that the impossibility of operating within the local exchange market is not enough to prove the impossibility of complying with the payment of a debt incurred in foreign currency since that is not the only means by which individuals can obtain US Dollars. In this respect, the Court of Appeals held that the claimant could have had investments in foreign currency or was capable of being liquidated in foreign currency, a statement which was not denied by the applicant.