Argentina has received a very hard varapalo on the courts of New York on Monday. Judge Loretta Perish has ordered the South American country with the delivery of 51% of the shares of the YPF oil company, when the controlist was the Spanish Repsol. The titles will be used as part of payment to the beneficiaries of a failure of September 2023, in which the shareholders who were considered affected by the nationalization process of the oil company. Argentina will not yield the actions immediately because the ruling is still appealable, but it is a door that closes in the legal strategy of the government of Javier Milei.
“For the reasons stated above, the demanding motion is granted,” says Presska’s sentence. “The Republic must transfer its YPF class D actions to a global custody account in BNYM [Bank of New York Mellon] in New York within 14 days as of the date of this order; and instruct Bnym to initiate a transfer of the interest interests of the Republic in their YPF class D actions to the plaintiffs or their designated within a business day from the date on which the actions are deposited in the account, ”closes the text.
The Argentine President, Javier Milei, already advanced in his account in X that the Government will appeal the ruling “in all the corresponding instances to defend national interests.” It was the line on the official strategy in a long post that I use to rant with its particular style against the governor of Buenos Aires, the Peronist Axel Kicillof, who was mining of economy when YPF was expropriated. “This situation is direct responsibility for the useless Soviet of Axel Kicillof (…) I warned that the Soviet is a ball!”, He wrote.
At the time of nationalization in 2012, 57.5% of YPF was in the hands of Repsol, 25.5% of Petersen investment energy and Petersen energy – two Spanish societies of the Eskenazy Argentine family group – and 17% distributed among minority investors, such as Ethon Capital. In 2023, and another 1,714 million dollars to Eton Capital. On stage also enters Buford Capital, a fund that is dedicated to the purchase of Rights of Judgment of broken companies to carry out complaints for large sums, a methodology similar to that used by the vulture funds with the debt titles. The Fund sued the Argentine State after acquiring the rights to Petersen investing energy and Petersen Energía, which are in the contest of creditors in Spain because at the time they borrowed to buy their participation in YPF, devalued with expropriation.
The Preska ruling of two years ago considered that at the time of expropriation, Argentina should have offered the treatment that gave Repsol to the rest of the shareholders, as established by the YPF Statute when it is a transfer of more than 15% of the shares. Argentina tried from the beginning to impose the argument that the case had to be left in local courts and that the expropriation of YPF had complied with all legal regulations, including a payment of 5,000 million dollars to Repsol. For Judge Preska, however, “foreign governments cannot simply cancel the exceptions to the FSIA [Ley de Inmunidades Soberanas Extranjera] invoking your own law to protect your execution assets in the United States. If international courtesy could prevail over the FSIA and allow foreign law to control which sovereign assets are subject to execution, each foreign state could avoid fulfilling failures in the US courts. ”
Presska left YPF out of litigation. That means that it will be the Argentine State and not the company (which still retains 49% of its shares in private hands) who must pay compensation. In any case, the government is not in a position to meet the lawsuit. Not only because he does not have the money, with his international reservations in negative and depending on the International Monetary Fund to sustain his currency. It happens that the YPF Nationalization Law prohibits the Executive to transfer expropriated actions without prior authorization from Congress.
The ruling surprised the Casa Rosada. In November 2024, after the triumph of Donald Trump and two months before his assumption, the United States Department of Justice requested by means of a letter to Judge Preska that rejected the compensation required by Burford Capital and Eton Capital, winners of the trial against the Argentine oil company. The White House argument was that the request of the plaintiffs Viola local laws from the United States and opens the possibility of some type of reciprocity by Argentina with American sovereign assets.
