Investment firms Petersen Energia and Eton Park have asked the U.S. Supreme Court to reinstate a $16.1 billion judgment against Argentina stemming from the country’s 2012 nationalization of oil company YPF.
The investors filed their petition on Wednesday, challenging a March ruling by the 2nd U.S. Circuit Court of Appeals that overturned the judgment and held that the claims should be litigated in Argentine courts.
The decision brought a setback to more than a decade of litigation over Argentina’s seizure of a controlling stake in YPF. Petersen and Eton Park argue that the appeals court improperly allowed Argentina to invoke its own domestic laws to avoid liability in U.S. courts.
Dispute Dates Back to YPF Nationalization
The case centers on Argentina’s 2012 takeover of a 51% controlling stake in YPF from Spanish energy company Repsol.
Petersen and Eton Park, which held minority interests in YPF, allege that Argentina violated the company’s bylaws by failing to make a mandatory tender offer for the remaining shares after taking control.
Those bylaws had been amended before YPF’s 1993 listing on the New York Stock Exchange. Under the provisions, shareholders were to receive a tender offer if the Argentine government regained majority control of the company.
A U.S. district court eventually entered a $16.1 billion judgment following a three-day trial focused on damages. The investors describe the award in their Supreme Court filing as the largest commercial judgment in U.S. history.
Investors Challenge Appeals Court Ruling
The Supreme Court petition raises questions about the interaction between U.S. jurisdiction and foreign sovereign law.
Among the issues presented is whether a foreign government can rely on its own laws to require claims to be pursued in its domestic courts when U.S. jurisdiction has otherwise been established under the Foreign Sovereign Immunities Act.
The investors also argue that U.S. courts should not defer to a foreign sovereign’s interpretation of its own law when that interpretation is raised for the first time during an appeal.
The petition, filed by former U.S. Solicitor General Paul Clement, contends that the 2nd Circuit’s ruling conflicts with Supreme Court precedent and has created a disagreement among federal appeals courts.
Argentina’s presidential office did not immediately respond to requests for comment, while YPF declined to comment.
The Supreme Court has yet to decide whether it will hear the case.
