Jonah Shrock is studying history at Brown University in Providence, RI.
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The Supreme Court of the United States rejected today a request by the government of President Mauricio Macrio to mediate the suit by British law firm Burford Capital for 3.5 billion US$ against Argentina and YPF for the nationalisation of the oil company in 2012. As such, the case will continue to be heard by the United States District Court for the Southern District of New York where Judge Loretta Preska took over from the late Thomas Griesa.
Burford, which is dubbed a “vulture” firm for its dealings defaulted and other risky processes, acquired the rights to carry on litigation for 15 million euros, lodding its complaint in the New York court known for the famous “pari passu” battle between the government of Cristina Fernández de Kirchner and hedge fund billionaire Paul Singer of Elliott Management. At stake is whether the expropriation generated a lack of debt payments from companies belonging to the Petersen Group, which is owned by the wealthy Eskenazi family.
Argentina and YPF attempted to argue that the suit, filed in a federal court in Manhattan, was barred by a U.S. sovereign immunity law and tried to use a provision in the law that deprives U.S. courts of jurisdiction over “sovereign acts of expropriation.” However, a three judge panel from the New York-based 2nd U.S. Circuit Court of Appeals in July 2018 ruled that the cases fell into the law’s exception for commercial activity. Today’s decision by the Supreme Court will allow this lower court ruling to remain in place.
This ruling may open the door for Argentina to be forced to pay even more money to its creditors.