The Argentine State Responds to NGO’s Motion on YPF Expropriation Case

The Argentine government has submitted a response to a motion filed by the NGO Republican Action for Argentina (Rafa), requesting the reversal of a ruling that ordered the country to pay $16.1 billion in compensation, plus interest, for the expropriation of YPF. The Argentine Treasury reiterated its commitment to clarifying the facts surrounding the acquisition of YPF shares by the Eskenazi family, as stated by official sources. This response comes as the international courts continue to scrutinize the case.

The Argentine government’s response also emphasized its willingness to collaborate with U.S. authorities in any investigation that could shed light on the circumstances surrounding the case. However, it maintains that U.S. courts are not the appropriate forum for resolving the claims of the plaintiffs in this case. This stance reflects a broader strategy by Argentina to challenge the jurisdiction of U.S. courts in matters that it considers to be within its domestic jurisdiction, similar to how the U.S. has historically asserted its sovereignty in cases involving foreign entities.

The Argentine defense strategy in this case is led by Juan Ignacio Stampalija, the new deputy treasury secretary designated for international issues, who replaced Andrés de la Cruz after his resignation last Friday. Stampalija is joined by Santiago Castro, the new Treasury attorney, who succeeded Rodolfo Barra, who was removed from the government a month ago.

The beneficiaries of the YPF ruling, the Burford and Eton Park funds, have also presented their arguments. They contend that the NGO Rafa “has no argument that demonstrates that it has a legally recognizable interest in commercial transactions, the reestatization of YPF or the related assets that are in the center of this case.” Additionally, they claim that Rafa intends to act as a “complainant” or private prosecutor, according to Argentine law. Sebastián Maril, director of Latam Advisors, who closely follows the trials against the country abroad, supports this view.

The beneficiaries further argue that Rafa has breached procedural requirements by not notifying all parties according to rule 24. Instead, Rafa sent its documents directly to the court without notifying the parties and without a valid justification for an ex-party treatment. This procedural lapse has raised questions about the legitimacy of Rafa’s intervention in the case.

Last week, Rafa appeared in the Court of Loretta Preska of the Southern District of New York to request that the ruling be revoked. The judge issued an order for the parties involved in the trial to review the reasons for the presentation. Fernando Irazú, representative of Rafa, told The Nation that “it is very transcendence that the reasons for the presentation are supported to protect the rights of all Argentines.”

According to Irazú, the sentence is “a procedural fraud that consumes an international fraud in a criminal scheme by which the fruit of government corruption that has affected YPF and all Argentines is taken.” Irazú appeared in the Presska Court with information and documents about the alleged fraudulent purchase, in 2008, of 25% of YPF’s shares by the Petersen group, of the Eskenazi family, in collusion with the Kirchner marriage.

Irazú also argued that not only the interests of Argentines are affected, but also those of Americans, as the ruling is a “policy making” that opens the American judicial system to corrupt entities seeking the fruits of corruption. This argument resonates with U.S. readers who are familiar with the importance of judicial integrity and the potential for foreign influence in domestic legal proceedings.

However, known the presentation, Maril pointed out that The Eskenazi theme was already a central part of the trial and was not part of the final ruling due to lack of evidencesince the judge himself considered that there were no arguments to cancel the case.

In a similar vein, the president of the fiscal court of the Nation, Miguel Nathan Licht, described the NGO’s approach as a “heroic remedy that He has the same chance to progress to the goalkeeper to head at the last minute of the gameand that goalkeeper is the Chapulín.” In his X account, he added:

“Already in United States v. Beggerly, 524 US 38 (1998), Scotus [Corte Suprema] He considered that relief under rule 60 (b) (6) is available only in extraordinary cases and that the parties must demonstrate that they could not have discovered the evidence of corruption previously through a reasonable diligence. What would be the act of corruption that He was omitted to the court yes It is said What was based on a complaint that is over 15 years old? And we will assume that, after the sentence, It would have been confirmed A act of corruption in the demanded country. Do you really think that the American court is obliged to take note? What a little serious! ”

On April 16, 2012, YPF shares were owned by 57.5% of Repsol, 25.5% of Petersen (a subsidiary constituted in Spain, owned by the Eskenazi family), and 17% of other minority investors, including Eton Park, with a shareholding of 3%. On May 7 of that year, the Law of Public Interest that left 51% of YPF’s shares in the power of Repsol “subject to expropriation” and under “temporary occupation” by the Argentine State entered into force in Argentina. In July, Petersen declared bankruptcy in Spain after having breached in May the payment of loans that made a pool of European banks to finance the purchase of YPF shares.

In May 2014, the expropriation by Argentina of 51% of YPF shares held by Repsol was completed, after paying the Spanish company $5 billion in sovereign bonds.

On March 4, 2015, the bankruptcy trustee of Petersen, extender of shares of YPF, sold all the claims related to the expropriation to Prospect Investments LLC, a subsidiary of Burford Capital LLC, background that presented the claims in the name of Petersen, as can be seen from the writing that YPF presented.

Just a month later, on April 8, Petersen filed a lawsuit against the country and YPF for “anticipated contract, breach of implicit duty of good faith and fair treatment, and promising impediment.” Petersen claimed that YPF breached alleged obligations to enforce the provisions of the public offering offer and sanctions on the actions acquired in violation of said provisions.

In June 2015, Eton Park, another YPF shares extension, filed demands against Argentina and the oil company.

On May 31, 2023, Judge Loretta Preska blamed the Argentine State but exempted YPF responsibilities. On September 16, after a process in which the amount of compensation was analyzed, the judge confirmed that Argentina must pay almost $16.1 billion plus interest.

In February 2024, the Argentine State presented in the Court of Appeals of the Second New York circuit the first brief with the arguments so that the second instance judges review the Pruka judgment.

In September 2024, The last writings were presented ends of the three parties (the plaintiffs, YPF and the State) before the Court of Appeals and are now waiting for It is designated a panel of three members and It is resolved the date of an audience in which the case will be discussed.

This case highlights the complexities of international legal disputes and the challenges faced by countries in navigating foreign judicial systems. The Argentine government’s response and the ongoing legal battle underscore the importance of clear jurisdiction and procedural integrity in resolving such disputes. As the case progresses, it will be crucial for all parties involved to adhere to the principles of fairness and transparency, ensuring that justice is served and the rights of all stakeholders are protected.