ARGENTINA’S economy ministry once again defiantly asserted the country has made a required debt payment on restructured sovereign bonds Friday night, just hours after a U.S. judge threatened a contempt-of-court order if Argentina did not stop issuing such statements.

    U.S. District Judge Thomas Griesa, who has overseen the nation’s long-running debt battle with hedge funds, railed at Argentina’s lawyers at a hearing in New York a day after the publication of another so-called legal notice insisting the government has met its payment requirements and was therefore not in default.

    Holding a newspaper copy of the notice, Griesa said if the false statements did not stop, a contempt of court order will become necessary.

    Later on Friday, however, Argentina’s economy ministry issued a statement accusing Griesa of “clear partiality in favor of the vulture funds.”

    “Judge Griesa continues contradicting himself and the facts by saying that Argentina did not pay,” the statement said.

    Meanwhile, a spokeswoman for the U.S. State Department said the United States would not permit the International Justice Court (IJC) in The Hague to hear Argentina’s claims that U.S. court decisions had violated its sovereignty.

    “We do not view the IJC as an appropriate venue for addressing Argentina’s debt issues, and we continue to urge Argentina to engage with its creditors to resolve remaining issues with bondholders,” the spokeswoman said in an email.

    Argentina petitioned the International Justice Court on Thursday, but the lawsuit could only move forward if the United States submitted voluntarily to the court’s jurisdiction.

    At the hearing, Griesa said he was not going to go further than a warning for now. He repeated that the two sides must continue negotiating with the aid of mediator Daniel Pollack.

    Griesa did not specify whether he might seek to sanction Argentina or its lawyers, though he said he was “glad” to hear Jonathan Blackman, Argentina’s lead lawyer, say his firm Cleary Gottlieb Steen & Hamilton did not aid in preparing the government’s latest legal notices.

    In rare circumstances, U.S. judges have held foreign governments in contempt and imposed monetary penalties. But such sanctions can be difficult to enforce, and federal appeals courts have split on whether foreign governments can be held in contempt at all.

    Federal law largely protects the assets of foreign governments held in the United States, said Michael Ramsey, a professor of international law at the University of San Diego.

    (SD-Agencies)