In a significant turn within the extensive international litigation for the expropriation of YPF, the United States Department of Justice formalized its support to the Republic Argentinarequesting that the foreign sovereign immunity be respected and the delivery of shares of the state oil company is suspended while the appeal is processed.
This support a Argentinapresented before the Chamber of Appeals of the Second District of New York, represents a diplomatic and legal milestone that could influence the outcome of a case that has been in the American courts for more than a decade.
The cause originated in 2012, when the Argentine government, under the presidency of Cristina Fernández de Kirchner, expropriated 51% of YPF’s actions that were in the hands of Repsol. The Burford Capital Fund, which acquired the litigation rights of the Petersen and Eton Park companies, initiated a lawsuit against the Argentine State because it considers that the expropriation was carried out without respecting the company’s statutes.
In 2023, Judge Loretta Presska, of the Southern District Court of New York, failed in the first instance against Argentina, condemning it to pay more than USD 16,000 million and ordering the delivery of YPF’s shares to the plaintiffs.
The recent support of the United States was completed through the figure of Amicus Curiae (friend of the court), a legal tool that allows third parties to argue in relevant judicial causes.
In his brief, the Department of Justice argued that the order of delivery of shares violates the principles of foreign sovereign immunity, established in the Foreign Sovereign Immunities Act (FSIA) of 1976 and in Federal Consuetudinal Law.
Points to consider
Among the outstanding points of the document are: the property of a foreign State located outside the United States cannot be executed by US courts without consent. Presska’s order could generate irreparable damage to Argentinasince if the actions are delivered and then the country wins the appeal, it could not recover them.
Demanding a bond during the appeal would force Argentina to locate assets in the United States, exposing them to embargoes. The suspension would not harm the plaintiffs, since Argentina maintains the actions and cannot sell them without legislative authorization.
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