WASHINGTON, Feb 27 (Reuters) - A lawyer for the Argentine government warned on Thursday there would be broad international consequences if the U.S. Supreme Court does not reverse lower court decisions ordering the country to pay $1.33 billion to hedge fund creditors.
"The issues here are incredibly important not just for Argentina but for the U.S. government and all foreign sovereigns," said Paul Clement, at a briefing on the case at the Argentine embassy in Washington, D.C.
He filed a petition with the Supreme Court on Feb. 18 on behalf of Argentina asking the justices to reverse a ruling by the 2nd U.S. Circuit Court of Appeals in New York.
That ruling was in favor of bondholders who refused to accept Argentina's two debt-restructuring offers after the country defaulted on $100 billion in 2002.
Should the lower court rulings be left intact, Clement said, there would be "powerful incentives" for other creditors to hold out when offered the opportunity to renegotiate debt terms.
A former senior lawyer in President George W. Bush's administration, Clement said his time working in government meant he understood the possible international implications of the lower court rulings.
Sergio Chodos, Argentina's alternative executive director before the International Monetary Fund, raised similar concerns.
The appeals court ruling threatens "the merely feasibility of having debt restructurings going forward," he said.
Clement declined to comment on which countries and entities
Argentina expected to file supportive court filings, known as amicus briefs, asking the Supreme Court to hear the case. These could potentially include the U.S. government and the IMF.
"We would expect there to be substantial amicus support for the petition," Clement said.
The holdout bondholders are led by hedge funds Aurelius Capital Management and NML Capital Ltd, a unit of billionaire Paul Singer's Elliott Management Corp.
They have previously said the dispute could be resolved if Argentina was willing to negotiate and criticized Argentina's government for threatening to ignore U.S. court rulings.
If the justices agree to hear the case, a decision could come between October, when the next Supreme Court term begins, and June 2015, the end of the term.
(Additional reporting by Kevin Gray in Buenos Aires; Editing by Sophie Hares)