Argentina has accused a U.S. federal court of committing “a kind of legal colonialism” for ordering its government to pay two American hedge funds more than $1 billion.

The case stems from a decade-old legal battle that arose after Argentina defaulted on its external debt in 2001. Argentine officials attempted to settle its debt with creditors by offering cut-rate deals, some as low as 25 cents on the dollar. Most of the creditors accepted deals in 2005 and 2010, but some did not.

Hedge funds Elliott Capital Management and Aurelius Capital Management not only rejected the deals, but sued Argentina in U.S. federal court. The country lost its last two court fights, with U.S. District Judge Thomas Griesa ordering this week for Buenos Aires to pay the two funds $1.3 billion, treating the litigious hedge funds the same as the creditors who agreed to the deals.

Leaders in Argentina rejected the ruling, and Economy Minister Hernán Lorenzino dared the U.S. to “send us the Fifth Fleet” if it wants the money that bad, according to the Financial Times.

Lorenzino called the hedge funds “vultures,” and pledged to take his country’s case to the U.S. Supreme Court.

On October 2, the NML Capital hedge fund, a subsidiary of Elliott Capital, convinced the government of Ghana to detain an Argentine tall ship, the ARA Libertad, as partial payment for the funds owed by the government of Argentina. The ship is used for training by the Argentine navy. The United Nations' maritime court agreed to hold a hearing on this matter on November 29.

-Noel Brinkerhoff, David Wallechinsky

To Learn More:

U.S. Court Orders Argentina To Pay Bond Holders In "Vultures" Row (by Daniel Bases, Nate Raymond and Andrew Longstreth, Reuters)

Argentina Fears Default After American Court Ruling (by Heather Stewart and Uki Goñi, The Guardian)

US Appeals Court Rejects Argentine Bond Arguments (by Michael Warren, Associated Press)

NML Capital, Ltd. et al v. Republic of Argentina (pdf)

The Real Story Of How A Hedge Fund Detained A Vessel In Ghana And Even Went For Argentina's 'Air Force One' (by Agustino Fontevecchia, Forbes)