YPF. A new opportunity

Sometimes, though rarely, opportunities are not created by the main players but by third parties who have little to do with the process. This is exactly what just happened in the YPF case, following a last-minute filing by a foundation in a New York court, asking the judge not to enforce the billion-dollar ruling.

The argument presented by the organization Republican Action for Argentina is as harsh as it is simple: the American judicial system has allegedly been used by an international conspiracy to carry out fraud and launder money. It began with the sale of a percentage of capital to an Argentine business group many years ago, followed by the arbitrary nationalization of only part of the shares, culminating in the sale of a litigation claim against the country, which resulted in a lawsuit and a $16 billion ruling.

As its main argument, the foundation invokes a criminal investigation that has been dormant since 2006 in an Argentine criminal court. It requests that before enforcing the ruling, the U.S. Department of Justice and other entities investigate the matter under the Foreign Corrupt Practices Act and the Racketeer Influenced and Corrupt Organizations Act, two laws that govern international corrupt practices.

The opportunity for Argentina is not just big; it is enormous. The core issue of the lawsuit (the legal dispute) has been, and still is, whether Argentina, by nationalizing part of YPF's shareholding package, violated the company’s bylaws, which required that in the event of a stock purchase, an equal offer be made to the rest of the shareholders. For Argentina, the expropriation was a sovereign act, not a purchase offer; for the plaintiff fund (and for the judge in her ruling), it was.

During part of Argentina’s legal defense (2017–2019), an attempt was made to broaden the discussion -especially during the evidence phase-to consider the entire context beyond the narrow scope of the bylaws. However, that approach shifted in later years when it was decided to limit the case to a purely legal issue—i.e., the company’s bylaws. That led to the ruling.

What the judge has just done is unprecedented: she has asked the parties involved to express their opinions. The plaintiff fund’s response is predictable. Argentina’s response is less clear. The country faces a dilemma worthy of a Greek tragedy: it could open a small window to avoid paying billions of dollars or it could uphold its main judicial policy decision—after all, the judge Argentina has nominated to the Supreme Court (and may appoint by decree and on an interim basis) is the same judge handling the YPF case mentioned in the filing. If morality were the only factor, the answer would be simple. The problem is that we live in an era of laissez-faire in all aspects, especially moral ones.

The deadline to respond is February 25th. A fundamental principle of procedural law is that a court ruling is considered legally binding truth; however, it is not necessarily the actual truth. This is the path the judge has opened, allowing a transition from domestic law to international law, where crimes do not create legal rights, no matter how well-disguised they are under neutral flags concealing smuggled goods.

February 23, 2025

February 23, 2025