Unconstitutionality of Restrictions Imposed by the Central Bank for the Purchase of Foreign Currency

On November 14, 2013, Tribunal “B” of the Civil Court of Appeals overruled the interlocutory ruling issued in re “Oulton Pino, Julia Ercilia Candelaria c/ Vidal, Susana Mabel s/ Preparación de la Vía Ejecutiva”, which denied the request of unconstitutionality of the foreign exchange regulations of the Central Bank of Argentina (the “Central Bank”). The Court declared the unconstitutionality of Communications “A” 5318, “A” 5330 and “A” 5339 (collectively, the “Communications”). 
In November 2009, the debtor acknowledged a debt denominated in US dollars. For this reason, the debtor was ordered to cancel the credit in such foreign currency. The plaintiff, unable to receive the credit in US dollars, challenged the constitutionality of the Communications.
Among other arguments, the plaintiff alleged that the Communications modify the Civil Code, which is a higher hierarchy law. The Central Bank argued that: (i) the plaintiff did not analyze the Communications in depth; (ii) foreign currency is an essential resource for economic policy and anyone who intends to acquire foreign currency must comply with the Communications; and (iii) it is the Executive and the Legislative Branches, and not the Judiciary Branch, that decide over such matters.
However, the Court of Appeals held that the Communications are unconstitutional for the following reasons:
a)  Freedom of contract has constitutional protection and therefore restrictions must be interpreted restrictively. 
b)  The sections of the Civil Code involved in this matter regulate the freedom of contracting in foreign currency. According to section 617 of the Civil Code, obligations in foreign exchange are payment obligations and according to section 619, the debtor is released by delivering the kind or the quality of the currency agreed.
c)  The Communications do not have the same hierarchy as the articles of the Civil Code and restrict freedom of contract. According to the Court, “it is inconceivable that –on the one hand- it is allowed to contract in foreign currency and, on the other hand, the possibility of acquiring foreign currency to cancel an obligation is denied”.
d)  The Communications exceeded the scope of the legislative delegation of the Central Bank, as it is authorized to “execute foreign exchange policy in accordance with the regulations of the Federal Congress” (section 3, Law No. 26,739), and not to make it impossible to  fulfill the obligations set out by Congress legislation, such as the Civil Code.