YPF Investors Ask Supreme Court to Restore $16.1B Judgment Against Argentina

Investment firms Petersen Energia and Eton Park have petitioned the U.S. Supreme Court to reinstate a $16.1 billion judgment against Argentina in a long-running legal battle stemming from the country's 2012 nationalization of energy firm YPF. The move seeks to overturn a lower court's decision that sent the case back to Argentine jurisdiction.

The Legal Challenge

The petition, filed Wednesday by former U.S. Solicitor General Paul Clement, asks the high court to review a March decision by the 2nd U.S. Circuit Court of Appeals. That ruling vacated what the investors described as the largest commercial award in U.S. history, concluding the dispute belonged in Argentine courts.

According to the filing, the investors argue the appeals court decision improperly allows a foreign nation to use its own laws to evade liability in U.S. courts, despite jurisdiction being established under the Foreign Sovereign Immunities Act. The petition contends the ruling conflicts with Supreme Court precedent and creates a split among federal appellate courts.

Background of the Dispute

The case originates from Argentina's 2012 seizure of a 51% controlling stake in YPF from Spanish oil major Repsol. Petersen and Eton Park, minority shareholders at the time, allege that Argentina violated YPF's corporate bylaws by failing to launch a tender offer for the remaining shares.

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Those bylaws were amended just before YPF's 1993 listing on the New York Stock Exchange, specifically to require a mandatory tender offer to all shareholders if the Argentine government ever regained a majority stake. A U.S. district court had previously sided with the investors, entering the $16.1 billion judgment after a damages trial.

Market Implications

A decision by the Supreme Court to hear the case would reintroduce significant legal and financial uncertainty for Argentina. If the judgment were ultimately reinstated, it would represent a substantial liability for the sovereign nation. For now, the petition is only a request for the court to take up the case.

According to Reuters, Argentina's presidential office did not immediately respond to a request for comment on the petition. YPF has declined to comment on the matter.