The United States Department of Justice has intervened in the ongoing New York litigation concerning YPF’s 2012 expropriation, formally backing Argentina’s stance against sanctions and contempt requests made by creditor funds. With critical decisions pending from the U.S. Court of Appeals for the Second Circuit, this diplomatic and legal development may influence the scope of sovereign immunity and information exchange obligations in cross-border commercial disputes.
The U.S. Department of Justice submitted a detailed 29-page brief to the Southern District of New York court, led by Judge Loretta Preska, urging denial of sanctions and penalties demanded by funds pursuing compensation for Argentina’s expropriation of YPF. The submission emphasized that the proposed sanctions—including economic penalties, procedural sanctions, and adverse inferences—contradict the Foreign Sovereign Immunities Act (FSIA) and principles of international legal reciprocity. It warned that imposing such measures on a sovereign state risks undermining U.S. foreign policy objectives and could impair how American entities are treated in foreign courts. The document specifically highlighted tensions arising from demands for testimony and information from high-ranking Argentine government officials, underscoring conflicts with international court etiquette standards.
Argentina’s National Treasury Attorney’s Office endorsed the U.S. intervention as validation of its technical legal approach grounded in sovereign immunity doctrine. Argentina has already produced in excess of 115,000 pages of documents during the evidentiary phase, with no successful demonstration by plaintiffs of evasion or non-cooperation. Nevertheless, the trial judge declined to suspend ongoing discovery, prompting Argentina to appeal to the Second Circuit, where arguments have been fully briefed and a ruling is anticipated.
The case is currently at a pivotal juncture with significant unresolved issues related to the potential transfer of YPF shares to creditors, the legitimacy of information requests, and the applicability of requested sanctions. Notably, the Biden administration’s sustained support following Javier Milei’s presidential inauguration injects a strong diplomatic dimension into the protracted litigation, heightening its implications for Argentina’s economic and international relations landscape.
