Citibank N.A. is set to tell an appeals court in New York that it faces “grave sanctions” from Argentina unless it defies a U.S. judge’s order blocking it from making payments to holders of $8.4 billion of the country’s bonds.

U.S. District Judge Thomas Griesa in Manhattan barred Citibank’s Argentina branch from forwarding a $5 million interest payment due Sept. 30 to the bondholders if the South American nation continues to refuse to make payments on its defaulted debt.