Petersen Energia Inversora, S.A.U. v. Argentine Republic
1:15-cv-02739
| S.D.N.Y. | Jun 30, 2025Background
- YPF S.A., originally wholly owned by the Argentine Republic, was privatized in 1993, but the Republic expropriated 51% of YPF’s Class D shares from Repsol in 2012 without making a required tender offer to other shareholders, including plaintiffs.
- Plaintiffs Petersen and Eton Park, former investors in YPF, won a $16.1 billion judgment against Argentina for breach of the YPF bylaws requiring a tender offer.
- Plaintiffs moved for a turnover order in the Southern District of New York to force Argentina to deliver the 51% YPF shares (uncertificated securities) to a New York custody account for satisfaction of the judgment.
- The shares are currently held in book-entry form on the books of Argentina’s central securities depository and not physically present in the U.S.
- Argentina opposes the turnover, citing sovereign immunity (FSIA), New York law restrictions, and comity concerns regarding Argentine laws limiting share transfer without legislative approval.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Are the YPF shares immune from execution under FSIA? | Not immune; shares used for commercial activity in the U.S. and tied directly to the breach | Immune; FSIA bars turnover, shares not U.S.-based/used for challenged activity | Not immune; shares used for relevant U.S. commercial activity and breach |
| Are the shares subject to turnover under New York law? | Yes; freely transferable, Republic has possession/custody, statutes allow out-of-state asset orders | No; shares subject to Argentine law and outside NY, not transferable per local law | Yes; NY law permits turnover; Court can order assets delivered from abroad |
| Does the FSIA allow execution if shares are transferred to NY? | Yes; once in a New York custody account, the shares are property "in the U.S." under FSIA | No; transfer process doesn’t make them U.S. property for FSIA purposes | Yes; after transfer to NY account, qualifies as property in U.S. for FSIA |
| Does international comity or Argentine law block turnover? | No; Republic has legal options, U.S. interest in judgment enforcement outweighs comity | Yes; Argentine law forbids transfer without legislature; comity should block order | No; no true conflict, FSIA exceptions override comity, Court orders turnover |
Key Cases Cited
- Koehler v. Bank of Bermuda Ltd., 12 N.Y.3d 533 (N.Y. 2009) (NY courts can order turnover of out-of-state assets if jurisdiction exists)
- EM Ltd. v. Republic of Argentina, 389 F. App’x 38 (2d Cir. 2010) (facilitation of investment and sale of securities is commercial activity under FSIA)
- Republic of Argentina v. Weltover, Inc., 504 U.S. 607 (U.S. 1992) (issuing securities as commercial activity for FSIA)
- Commonwealth of N. Mariana Islands v. Canadian Imperial Bank of Commerce, 990 N.E.2d 114 (N.Y. 2013) (possession/custody required for turnover under NY law)
- Foremost-McKesson, Inc. v. Islamic Republic of Iran, 905 F.2d 438 (D.C. Cir. 1990) (using majority position in company for commercial activity under FSIA)
- NML Capital, Ltd. v. Republic of Argentina, 699 F.3d 246 (2d Cir. 2012) (injunction against sovereign to perform obligations under U.S. law)