The length of the title of this note requires us to be precise and to try to be as specific and didactic as possible with the topic.
Case hypothesis
I will begin by not going into detail on what has been public and well-known until recently, consisting of the number of exchange regulations and requirements to be able to normally carry out an international purchase and sale operation; in the case of this note, an import. And although in principle it may be something hypothetical, I do not think it is prudent to rule out that there are several cases like the one I am going to present below.
In an import operation, agreed and completed during the year 2023, in the midst of a period of innumerable regulations, prohibitions and restrictions for access to the exchange market for transfers abroad, the Central Bank (i.e. the National State) imposes on the importer, through relevant regulations, the postponement of the date of the transfer of foreign currency. At that time, the importer suffers a delay with his supplier, due to the imposition of regulations of the State of his own country. In other words, the imposed postponement is not his responsibility. Aware of this, the operator accepts the condition because it is an administrative imposition, waiting for access to take place for the transfer. However, this does not happen and, in addition, the change of government is followed by a devaluation of just over 50%. That is to say, the State, which prevented the importer from settling its obligation in a timely manner with its foreign supplier by first delaying the deadline and then devaluing the currency in such a way that free access now makes its purchase more expensive by more than 50%, that same State, beyond its authorities, previous or new, has caused serious financial damage to an operator, who I understand is legitimately in a position to claim, by way of a precautionary measure and a subsequent claim for damages, from the State. Following this story, I reiterate that, although hypothetical, I do not rule out similar situations, I move on to the relevant legal considerations.
Arguments
?The proper acts
First of all, I must point out that all the restrictions that had to be applied (namely SIMI, SIRA, Circulars, etc.) have been absolutely unconstitutional, and there have been several rulings that have given rise to precautionary measures. I do not have to go into this in detail, as reference has been made to it on other occasions.
In the situation described, in addition to these constitutional violations, there is a serious damage to property as a result of the actions of the State itself, which, although the administrative acts are presumed legitimate, such presumption is not absolute in terms of constitutional or conventional rights and guarantees; therefore, the State's own acts are also subject to effective judicial protection.
Let us then consider the doctrine of own acts. It deals with the inadmissibility of acting against one's own acts previously done; that is, it prohibits a person from going against his own behavior previously developed, with the same interlocutor and on the same subject, to then ignore them and limit or impede the other party's legitimate rights, having acted opportunely in that way moved by the good faith of the first. And this is so because when the importer planned the natural development in a reasonable time, the State itself with its subsequent conduct, frustrated the expectation causing damage, not at all irrelevant. Even more so, when the original expectation has been reasonable and in accordance with the imposed legal system. In such a way that, the State itself, cannot then allege a right or exception, because such a claim of defense would be inadmissible, since it even affects the State's own power.
The doctrine of own acts has long been accepted by the Supreme Court of Justice of the Nation, by warning that no one can contradict his own acts, exercising conduct incompatible with a previous deliberate conduct, legally relevant and fully effective.
?The lack of foresight
These are circumstances that result in the revision of a contract or agreement, when something supervening and extraordinary substantially modifies the conditions for compliance with the agreement, causing serious unexpected damage to one of the parties and an excessive advantage to the other.
In similar situations, it is enough to remember what happened from 2001 and 2002 with the abrupt exit from convertibility. In this regard, the Court in the "Smith" case of February 2002, considered that "There has been, in a short period, a profusion of regulations on the subject which, in some cases, rather than tending to establish clear guidelines on the availability of sums deposited in banking and financial institutions by individuals, has generated an unprecedented and prolonged state of uncertainty.
Particularly in this case, there is a contract of reciprocal performance and execution within a reasonable period, with the purchasing party (Argentine importer) accepting the condition imposed by the State of his country for access to the exchange market and cancellation of his obligation, so that later the same State modifies these conditions through unforeseeable and extraordinary economic conditions that seriously affect the possibility of compliance of the importer's obligation to his supplier.
?The shared effort
In situations of economic emergency, shared effort is not a mere option, but rather becomes an obligation in accordance with basic principles of law such as equity and good faith. In other words, the parties are somehow compelled to find a solution before the termination of a contract. Of course, this is common in the realm of private law, but it does not exclude its application when one of the parties is the State, since there is a commitment that the State assumed with a citizen; a commitment that the State itself later violated by ignoring the substantial modification of what was agreed, because such modification was not due to an action proper to the free market, but rather by the disposition of the State to devalue the currency. Thus, with the application of the principles of good faith and shared effort, it could be achieved that the damage to the importer is less than that actually caused, allowing access to the exchange market with an agreed exchange rate, which, while still higher than the original at the time before the devaluation, is not the current one, exceeding the previous one by more than 50%.
?Abuse of rights
An administrative measure may in no way hinder or impede compliance with regulatory provisions on private sales, regulated by the Civil and Commercial Code of the nation and international standards that are part of our legal system, not even under the argument of the application of economic policy measures by a government, as long as such measures hinder, hinder or prevent the normal development of explicit and implicit rights of our CN, which as such expresses its art. 33 "the declarations, rights and guarantees enumerated in the Constitution will not be understood as a denial of other rights and guarantees not enumerated; but which arise from the principle of the sovereignty of the people and the republican form of government."
Although the Central Bank has the power to regulate monetary and exchange control measures, this does not imply preventing normal access to legitimate exchange operations, the consequences of which for a company or individual may involve the cessation of payments and the total paralysis of its commercial activity, protected as an explicit right in the CN (to work and exercise any lawful industry). In other words, the pact on which our entire legal and political system is based is violated as an excuse for a necessary economic policy measure.
These administrative regulations, which are of a much lower rank in the legal pyramid than the CN and also the laws that are enacted as a result, modify a regime without a law from the National Congress authorizing it, which makes their unconstitutionality evident. Furthermore, the powers that the National Congress has granted to the Central Bank in no way imply the possibility of exchange rate measures that prevent a person, physical or legal, from fulfilling their legitimate contractual obligations.
Consequently, this is not just a matter of a specific validation, but rather a clear violation of the rights and guarantees enshrined in the NC. And this in no way questions the State's power to control the currency market or the currency exchange, but the way in which it is implemented goes against such rights and guarantees, violating basic principles of legality, reasonableness and legal certainty.
Consequently, the automatic, straightforward application of regulatory powers, including monetary devaluation, which also prevents compliance with what was agreed upon with prior conditions, is a clear abuse of rights by the State, which, beyond a change of government, the State is the same and its commitment must be fulfilled under the agreed conditions.
In the case at hand in this presentation, the contractual obligation assumed cannot be prevented from being fulfilled by a subsequent rule, and even less so when such rule does not even emanate from the National Congress and clearly and concretely violates the autonomy of the contractual will and the binding nature of contracts, which in this particular case is violated by an administrative measure contrary to law and which seriously affects the viability of the company as a consequence of a decision by the State. An arbitrary and extraordinary decision. Of course, the State and the Central Bank have regulatory powers; but when constitutional rights and guarantees are violated in the exercise of such powers, such measures have a defect of legitimacy because they are arbitrary and unreasonable, as well as abusive.
In the case at hand, such abusive exercise may be prevented through the action of a precautionary measure, in accordance with the Civil and Commercial Code itself, which prescribes it in the third paragraph of its art. 10, which specifically establishes the possibility of preventive protection to cease the effects of an abusive act or legal situation, and in art. 2589. “The abuse of law is a legitimate cause of paralysis of the law deviated from its regular purposes, which may be thwarted by means of action or exception; either so that the holder of the right ceases his irregular claim, or so that the abusive attempt to obtain judicial protection for said irregular exercise is blocked (CNCiv., Sala C, vote of Dr. Cifuentes to which Dr. Alterini adheres, 2-5-1983, ED105-263, with a citation from the following authors: “LLAMBÍAS, Jorge Joaquín: “Código Civil Anotado”, Buenos Aires, Abeledo-Perrot, volume II-B, 1979, p. 302; BORDA, Guillermo A: “Treaty of Argentine Civil Law. General Part”, Buenos Aires, Editorial Perrot, volume I, 1970, p. 51-52, among others)”
Conclusion
The agreed conditions, also assumed by imposition of State directives, cannot later be varied by the same State that imposed such directives, under the pretext of administrative powers or economic emergency, in such a way as to make impossible the fulfillment of a private contractual obligation that was legitimately assumed with the expectation of cancellation of its obligation, assured by the State and that subsequently, first prevented such cancellation, imposing a postponement and then, devalued the currency causing irreparable damage to the importer. In short, modifying the value of the commercial transaction to that initially assumed by the importer, in terms of its payment capacity to which it adjusted its commitment with its foreign supplier and under the regulatory frameworks and deadlines imposed by the State itself at the time of obligating itself with the foreign country. Understanding that in situations such as the one described here, it would be appropriate to make way for effective judicial protection of the importer, by means of a precautionary measure and the search for an agreement between the importer and the State to obtain foreign currency, with an exchange rate identical to that originally determined by the State or, some other exchange rate that, even if higher, does not reach the result of the abrupt, extraordinary and unforeseen devaluation.
The author is a lawyer and member of the Institute of Customs Law and International Trade of the Argentine Association of Constitutional Justice.
