YPF investors seek U.S. Supreme Court review of overturned $16B judgment

On October 1, investment firms Petersen Energia and Eton Park filed a petition with the U.S. Supreme Court to revive a $16.1 billion judgment against Argentina in the ongoing YPF litigation. This move comes in response to a March decision by the 2nd U.S. Circuit Court of Appeals, which ruled that the claims should be heard in Argentine courts, rather than in the United States. The investors claim this decision improperly allows a foreign nation to use its own laws to avoid liability in U.S. courts.

The dispute is centered around Argentina's 2012 nationalization of a controlling stake in YPF, a Spanish-owned oil company. Petersen and Eton Park assert that Argentina violated YPF's bylaws by failing to offer a buyout to minority shareholders following the seizure of the 51% stake from Spain's Repsol. Argentina had amended YPF's bylaws prior to its 1993 listing on the New York Stock Exchange, requiring a mandatory tender offer to all shareholders if the government regained majority control.

A U.S. district court had previously awarded $16.1 billion to the investors, citing damages from a three-day trial. The petition seeks to determine whether a foreign sovereign can impose its own laws requiring claims to be heard in its domestic courts, despite jurisdiction established by the Foreign Sovereign Immunities Act. The petition also questions whether U.S. courts should defer to a sovereign's interpretation of its own law when that interpretation is first advanced on appeal.

Former U.S. Solicitor General Paul Clement, who filed the petition, argues that the 2nd Circuit's decision conflicts with Supreme Court precedent and creates inconsistencies among federal appellate courts. Argentina's presidential office has not commented on the matter, and YPF declined to provide a response.