The justices left in place a lower court ruling that allowed privately held Petersen to sue after Argentina’s government refused to buy back the company’s shares.
The United States (U.S.) Supreme Court on Monday rejected Argentina’s bid to fend off a lawsuit by energy company Petersen Energia Inversora, S.A. seeking compensation for shares it owned in the state-owned YPF S.A. (Fiscal Oilfields) energy company, nationalized in 2012 by former left-wing President Cristina Fernandez Kirchner.
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The justices left in place a lower court ruling that allowed privately held Petersen to sue after Argentina’s government refused to buy back the company’s shares. The appeals court upheld a 2016 ruling by U.S. District Judge Loretta Preska in Manhattan.
The New York-based 2nd U.S. Circuit Court of Appeals in July 2018 rejected arguments by Argentina and YPF that the suit should be dismissed because a U.S. law called the Foreign Sovereign Immunities Act deprives U.S. courts of jurisdiction over “sovereign acts of expropriation.” A unanimous three-judge 2nd Circuit panel ruled that the suit fell into the law’s exception for commercial activity
The Madrid-based Petersen subsidiaries were not challenging the expropriation itself but said that the action had triggered shareholder protection provisions in YPF‘s bylaws, which were added when YPF began trading on the New York Stock Exchange in 1993
“The company will utilize all the legal recourses necessary to defend its interests,” YPF said in a statement to the Buenos Aires Stock Exchange
When Fernandez was elected in 2007 and re-elected in 2011 with 54 percent of the vote, the former first lady embarked on a program of nationalization, including YPF. In 2012, Argentina expropriated 51 percent of YPF‘s shares, all from Repsol S.A
When campaigning for the presidency, the current head of state Mauricio Macri was forced to concede some ground to Kirchner policies, saying he supports nationalization of the YPF oil company and Aerolineas Argentina, as well as many of the social programs introduced by the couple