Judge in the U.S. rules on seizure: Argentina should transfer 51% of YPF shares if taken by expropriation
In a landmark ruling, American Judge Loretta Preska has ordered Argentina to transfer 51% of its Class D shares in YPF, the oil and gas company, to Petersen Energia Inversora and Eton Park Capital Management. The decision is part of an effort to partially satisfy a $16.1 billion court judgment against the South American country.
The ruling stems from Argentina's 2012 expropriation of its stake in YPF from Spain's Repsol, without offering a tender for the shares held by minority investors, including Petersen and Eton Park. The dispute originated in 2012 and was heard in American courts, with the companies alleging that Argentina did not present a public offer for acquisition as required by law.
Judge Preska's order mandates Argentina to transfer the YPF shares within 14 days to a custody account at BNY Mellon, which will then transfer the shares to the plaintiffs within one business day. Argentina has been appealing this ruling since September 2023 but has faced rejection on legal grounds, including the judge dismissing Argentina's arguments about sovereignty immunity and comity—the principle that courts should respect the laws and judicial decisions of other countries.
Judge Preska emphasized that "comity is not a one-way street" and highlighted the U.S.'s strong interest in enforcing its judgments, preventing foreign governments from using their own laws to shield assets from execution in the U.S. The ruling is grounded on enforcing compensation for the expropriated assets under U.S. jurisdiction, rejecting Argentina's claims of immunity, and facilitating recovery for the investors who lost their shares due to Argentina's 2012 seizure of the YPF stake.
In September 2023, Argentina was ordered to pay $14.385 billion to Petersen Energy and $1.714 billion to Eton Park, the recipients of the transferred shares. The payment amounts total $16.099 billion. The change of ownership of the shares will begin after the transfer, with the shares of YPF continuing to be traded on the New York Stock Exchange.
This ruling marks a significant step in the ongoing legal battle between Argentina and the investors who lost their shares in YPF due to the country's expropriation in 2012. The decision underscores the importance of adhering to legal processes and respecting the rights of minority investors in cross-border transactions.
The ruling by Judge Preska signifies a significant progress in the ongoing dispute between Argentina and the investors,such as Petersen Energia Inversora and Eton Park Capital Management, who lost their shares in YPF due to Argentina's expropriation in 2012. This decision also highlights the importance of abiding by legal processes and respecting the rights of minority investors in the finance and energy industry.
