Petersen Energia Inversora, S.A.U. v. Argentine Republic
25-1687
2d Cir.Sep 25, 2025Background
- Petersen Energia Inversora S.A.U. et al. seek turnover of Argentina’s 51% ownership in YPF S.A.’s Class D shares to satisfy a ~$16.1 billion judgment.
- YPF was privatized in 1993 via an IPO; ADRs and NYSE listing were financed with BNYM as depository; Argentina remained a 51% owner of YPF through Repsol’s 51% stake in Class D prior to expropriation.
- May 3, 2012, Argentina enacted Law 26,741 expropriating 51% of YPF (and 60% of Repsol YPF Gas), with a structure intended to transfer control while preserving public interests; law restricts transfers without National Congress approval.
- Since 2012, Argentina has controlled YPF’s major decisions through that majority stake, including board elections and major issuances; YPF ongoingly raises US-domiciled debt and markets its shares and ADRs.
- YPF’s shares are uncertificated (book-entry) assets held in CdV, Argentina; plaintiffs rely on NY CPLR and NY UCC provisions to reach and turnover these assets, notwithstanding Argentine expropriation law.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Shares are immune from turnover under FSIA | Shares used for commercial activity in the US, so FSIA exception applies | Expropriation and law-based restraints shield assets from turnover | No; FSIA does not immunize the Shares; they are used for US commercial activity and not immune. |
| Whether NY CPLR 5225 turnover is proper | Shares can be turned over despite being outside NY; proper garnishee/delivery mechanism exists | Sovereign asset transfer requires adherence to Argentine law and comity concerns | Yes; NY CPLR turnover mechanisms apply to uncertificated securities held via CdV and 8-112 reach supports turnover. |
| Whether the Shares qualify as property in the United States after turnover | Global custody transfer creates NY situs for security entitlements | Argentine law governs transfer and ownership; no US situs | Yes; after transfer to BNYM global custody, ownership interests have NY situs under UCC. |
| Whether comity restricts keeping or transferring assets | Strong US interest in enforcing judgments overrides potential Argentine limits | Comity may constrain execution against sovereign assets | Comity considerations favor granting turnover to enforce the judgment. |
Key Cases Cited
- Crystallex Int’l Corp. v. Bolivarian Republic of Venezuela, 932 F.3d 126 (3d Cir. 2019) (attachment of controlling shares used to run the US-based business supports FSIA waiver)
- Weltover, Inc. v. Republic of Argentina, 504 U.S. 607 (U.S. Supreme Court 1992) (issuing bonds is commercial activity; activities of sovereigns tied to US markets)
- Foremost-McKesson, Inc. v. Islamic Republic of Iran, 905 F.2d 438 (D.C. Cir. 1990) (sovereign control of a private enterprise constitutes commercial activity)
- Laker Airways, Ltd. v. Sabena, Belgian World Airlines, 731 F.2d 909 (D.C. Cir. 1984) (anti-suit/international enforcement tensions; comity considerations in international enforcement)
- Kirschenbaum v. 650 Fifth Ave. Co., 830 F.3d 107 (2d Cir. 2016) (control of a property used in enforcement; FSIA considerations on alter ego)