YPF investors ask US Supreme Court to revive $16.1 billion judgment against Argentina

By Natalia Siniawski and Leila Miller

Oct 1 (Reuters) - Investment firms Petersen Energia and Eton Park petitioned the US Supreme Court on Wednesday to reinstate a $16.1 billion judgment against Argentina in the long-running litigation on Argentine energy firm YPF YPFDm.BA.

The petition seeks to overturn a March decision by the US Court of Appeals for the Second Circuit, which held the claims belonged in Argentine courts rather than the United States. That decision overturned a judgment entered after more than a decade of litigation. The investors argue the ruling improperly allows a foreign nation to rely on its own laws to avoid liability in U.S. courts.

BACKGROUND

• The dispute centers on Argentina's 2012 nationalization of a controlling stake in YPF. Petersen and Eton Park allege Argentina violated YPF's bylaws by failing to launch a tender offer to minority shareholders after seizing a 51% stake from Spain's Repsol REP.MC.

• Argentina amended YPF's bylaws prior to its 1993 New York Stock Exchange listing to require a mandatory tender offer to all shareholders if the government ever regained majority control.

• A US district court had previously entered a $16.1 billion judgment — described in the petition as the largest commercial award in US history — after a three-day damages trial.

KEY ARGUMENTS

• The petition asks whether a foreign sovereign can use its own law to require claims to be brought to its domestic courts despite jurisdiction established under the Foreign Sovereign Immunities Act.

• It also questions whether US courts should defer to a sovereign's interpretation of its own law when that interpretation is first advanced on appeal.

• The petition, filed by former US Solicitor General Paul Clement, argues the 2nd Circuit decision conflicts with Supreme Court precedent and creates a split among federal appellate courts.

• A spokesperson for the Argentine Treasury Solicitor's Office said the filing "constitutes a procedural step that had already been anticipated by the Argentine Republic and on which we are already working."