The Supreme Court confirmed the “pesification” of bank deposits

The Supreme Court’s decision was issued in an “amparo” proceeding -summary judgment on constitutional grounds- filed by four depositors, requesting the return of their deposits and savings accounts in the currency of their original deposits.The total amount of the disputed sum was US$ 1,334,110 (Supreme Court of Justice, October 26, 2004, in re: “Bustos, Alberto Roque y otros c/ Estado Nacional y otros s/ amparo”).

Both the trial and the appellate courts found for the plaintiffs and ordered the financial institutions to return the plaintiffs’ deposits in the currency in which they had been made.

The Supreme Court, with a majority vote, reversed the judgment of the Court of Appeals and dismissed the plaintiffs’ amparo proceeding.

The majority of the Court, formed by Justices Belluscio, Maqueda, Boggiano, Zaffaroni and Highton de Nolasco, shared -in all material respects- the grounds set forth in the opinion of the Attorney General, Dr. Esteban Righi.The Attorney General stated that even if the emergency rules could have been originally reproachable, the rules issued thereafter (exchange for bonds, among others) mitigated the consequences of the first measures, guaranteeing the plaintiffs’ constitutional rights.The Attorney General also stated that all sectors of society have been subject to sacrifices imposed by the crisis and this is the depositors contribution to weather the crisis.

In addition, the majority of the Court ruled on the measures adopted by the Argentine Government as a whole, not only considering Decree No 214/02 but also the different alternatives made available to depositors thereafter.The Supreme Court found that all these measures comply with the reasonability standard required to be constitutionally valid in economic emergency situations.

The Supreme Court’s opinion confirmed the conversion of foreign currency deposits into Pesos at a rate of one Peso and forty cents for each U.S. Dollar or any other foreign currency plus interest and the application of the Reference Stabilization Ratio (Coeficiente de Estabilización de Referencia or “CER”), as published by the Central Bank of the Republic of Argentina.

The minority opinion, represented by Justice Fayt, stated that Decree No 214/02 is unconstitutional because it impaired the right to property of depositors and that the rules issued thereafter (exchange for bonds) were insufficient to avoid the negative effects of the “pesification” of bank deposits. In addition, Justice Fayt urged trial courts to try to bring the parties’ positions closer when enforcing the final judgment, suggesting the establishment of payment schedules.

The judgement constitutes an important and innovative precedent for similar cases. However, we will wait and see what future decision the courts will reach in cases of deposits less than US$ 140,000 or if the facts of the case address a situations of humanitarian nature.Particularly since in dicta Justice Zaffaroni of the majority stated that these are special cases deserving special consideration.