Argentina seeks to halt $16bn YPF judgement enforcement in UK court
Argentina has approached London’s High Court to request a suspension on the enforcement of a judgement valued at more than $16bn, concerning its nationalisation of oil and gas company YPF.
According to a report in Reuters, the legal move is part of Argentina’s broader strategy to appeal the decision in the US, where a New York court in 2023 had ruled in favour of Petersen Energia Inversora and Eton Park Capital Management.
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Supported by litigation funder Burford Capital, these entities have claimed they are owed an amount exceeding $17bn, including interest accruing at an estimated rate of $2.5m per day.
The origins of this legal dispute trace back to 2012 when Argentina took control of a 51% stake in YPF from Spanish company Repsol. This action was undertaken without extending an offer to purchase shares held by minority investors, prompting the current legal claims.
Argentina has contested the ruling from the US court and is also challenging its enforcement in the UK.
During proceedings at London’s High Court, Argentina’s legal representative David Railton advocated for pausing the case until the appeal process concludes in the US. He argued that investors would face no disadvantage since “there are no assets here against which the judgement can be enforced”.
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By GlobalDataIn contrast, Petersen Energia Inversora and Eton Park Capital Management have alleged that Argentina is attempting to postpone enforcement. Their legal counsel, Paul McGrath, argued that if the court considers a pause, then Argentina should be required to provide security estimated at $2.5bn.
Originally established as a state-owned enterprise in 1922, YPF underwent privatisation in 1993 via a public offering on the New York Stock Exchange (NYSE). As part of this transition, bylaws were updated to stipulate that should government control exceed 49%, minority shareholders must be offered buyouts at an established price.
This process included specific notification requirements through New York’s financial channels and filings with relevant authorities. The Argentinean Government under then-President Cristina Fernández de Kirchner did not adhere to these requirements during the 2012 nationalisation.
At that time, Petersen Energía Inversora and Eton Park Capital Management collectively owned more than 25% of YPF’s shares.
Petersen’s inability to manage its debts due to halted dividend revenue from YPF led to its bankruptcy and subsequent 2015 lawsuit against Argentina for breach of contract; Eton Park filed a similar lawsuit in 2016.
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