The Burford Capital fund appealed the acquittal of the oil company YPF in the case for the expropriation of the company. This way, seeks to re-involve YPF in the casegiven that, in March, the judge Loretta Preskaof the Southern District Court of New York, had exempted YPF from responsibilities and had decided to condemn the Argentine State.
YPF communicated the decision to the market, assured that they do not owe “any damage” to the plaintiffs and anticipated that they will exercise their “right to defense.”
The news was expected by the market: the English law firm had already anticipated that they were going to put YPF back into the trial if Argentina appealed, which is precisely what happened last week.
Appeals war
In the ruling for the expropriation of 51% of YPF shares in 2012, Preska determined on March 31 of this year that The Argentine State was guilty, while it absolved YPF. The final ruling came on September 15, where the claims presented by the plaintiffs against YPF were dismissed, and it was decreed that the oil company had no contractual responsibility during the nationalization. The ruling determines that Argentina must pay US$16 billion to the investment fund.
For this reason, on October 10, the Government appealed the ruling, ensuring that it would generate “irreparable damage to the population”, in a country without access to the capital market to “issue a bond and deposit a guarantee.” The appeal was made to the New York Court within 30 days of the ruling.
For this reason, this Wednesday, October 18, one week later, came Burford’s appeal to the part of the case in which YPF was acquitted, to re-involve the company in the case.
Possibles scenarios
Forward, Sebastian Maril, a lawyer at Latin Advisors, foresees several scenarios: due to Argentina’s appeal, if the country deposits the guarantees, it will avoid international embargoes. Whereas, if he doesn’t, Burford can start making seizures.
Upon Burford’s appeal as well as that of the Argentine State, the case went to the Second Circuit Court of Appeals, which They can last between 9 and 12 months in arriving at a definition. There are still a few instances left before reaching the Supreme Court.
On the other hand, Maril wonders what will happen if there is a new Government in Argentina as of December 10: will the appeal continue or will he negotiate a new agreement? he wrote on his Twitter account.
The parties are awaiting Preska’s imminent decision, which must indicate from when the ruling issued on September 15 would take effect.
At the beginning of October, Burford Capital demanded that Preska enable the possibility of seizing Argentine assets abroad as of October 16that is, from 30 days after the sentence was issued.
Faced with this, Argentina considered that Burford Capital and Eton Park did not respect “a reasonable period”, which in its opinion is the duration of the entire appeal process.
To avoid this measure, the plaintiffs demanded that Argentina preventively deposit before the Preska court a guarantee equivalent to the amount of the ruling for US$16,000 million.
YPF’s response
This Thursday, Margarita Chunresponsible for market relations at YPF, sent a letter to the Buenos Aires Stock Exchange, the National Securities Commission, Byma and the MAE in which he communicated the judicial news: “The plaintiffs appealed the Final Sentence of the Court of District in relation to YPF and those decisions that, for the purposes of the appeal, are included in the Final Judgment”.
However, in the letter, Chun defends the company: “The United States District Court for the Southern District of New York ordered, sentenced and decreed that all of Plaintiffs’ claims against YPF were dismissed, declaring that YPF has no contractual liability and does not owe Plaintiffs any damages for breach of contract. ”.
Furthermore, the letter concludes: “YPF will continue to defend itself in accordance with the applicable legal procedure and the available defenses.”
Source: Ambito
