This edition of Argentine Business Law Watch1 reports on a recent appellate court decision that denied a summary foreclosure remedy based on a foreign business’s failure to register in Argentina. We also discuss a new Central Bank release aimed at restricting capital flight.
Unregistered Foreign Corporation Taints Summary Foreclosure Remedy
An Argentine court of appeal has ruled that a mortgage loan assignee was not entitled to foreclose under a summary proceeding (vía ejecutiva2) as a result of the assigning bank’s failure to register as a foreign entity. The court held that the foreign corporation that originated the loan, Heritage Bank Limited, had failed to comply with the Argentine Companies Law3 requiring registration by any foreign entity engaged in "systematic and continuous" activity in Argentina. Because it could not have received rights any greater than the assignor’s, the mortgage assignee could not use the summary proceeding, which essentially eliminates all affirmative
