Petersen Energia Inversora, S.A.U. v. Argentine Republic
- Loretta Preska
- 1:15-cv-02739
- U.S. District Court · Southern District of New York
- 10
In Petersen v. Argentine Republic, Judge Preska granted in part and denied in part the Republic’s reconsideration motion and denied oral argument as moot.
The ruling affects the Argentine Republic, YPF S.A., Petersen Energía Inversora, S.A.U., Petersen Energía, S.A.U., Eton Park Capital Management, L.P., Eton Park Master Fund, Ltd., and Eton Park Fund, L.P., by setting the scope of evidence and further proceedings after the court’s earlier summary-judgment ruling.
What happened
Petersen Energía Inversora, S.A.U. v. Argentine Republic, consolidated with Eton Park’s related action, concerns claims by former YPF shareholders against the Argentine Republic and YPF S.A. The court’s earlier ruling granted YPF summary judgment, granted the Republic summary judgment on the good-faith-and-fair-dealing claim, otherwise denied the Republic’s motion, and granted the plaintiffs summary judgment on liability but not damages.
The Republic asked Judge Preska to reconsider that ruling. It argued that the court should have held live testimony from experts on Argentine law, relied on a later opinion by Judge Villanueva, and reconsidered the prejudgment-interest rate. The court rejected those arguments, explaining that the request for live testimony came too late, the later opinion was new evidence created in response to the ruling, and the Republic had not shown an obvious error.
Judge Preska granted in part and denied in part the Republic’s reconsideration motion. She allowed the Republic to submit evidence that it did not control YPF shares before May 7, 2012, but barred evidence that it acquired control after that date. She also denied the Republic’s request for oral argument as moot.
The detailed version
- Petersen Energia Inversora, S.A.U. v. Argentine Republic · No. 1:15-cv-02739
- Loretta Preska
- May 24, 2023
Background
Petersen Energía Inversora, S.A.U. and Petersen Energía, S.A.U. together were called Petersen. Eton Park Capital Management, L.P., Eton Park Master Fund, Ltd., and Eton Park Fund, L.P. together were called Eton Park. Petersen and Eton Park, which previously owned stakes in YPF S.A., sued the Argentine Republic and YPF.
In a March 30, 2023 Opinion and Order, the court granted YPF’s motion for summary judgment. It granted the Republic’s motion for summary judgment on the plaintiffs’ claim for breach of the duty of good faith and fair dealing, denied the Republic’s motion otherwise, and granted the plaintiffs’ motion for summary judgment against the Republic as to liability while denying it as to damages. Summary judgment is a decision based on the record when the court determines that a trial is unnecessary for the issue being decided.
The Republic moved for reconsideration. Reconsideration is an extraordinary request asking the court to revisit an earlier ruling, generally based on a change in controlling law, new evidence, or a need to correct a clear error or prevent manifest injustice.
Arguments and analysis
The Republic argued that it was unfair for the court to decide disputed questions of Argentine law without live testimony from legal experts. The court rejected the argument because the Republic had not raised the need for live testimony during summary-judgment briefing and had previously argued that disagreement between experts on foreign law did not prevent summary judgment. The court also held that Federal Rule of Civil Procedure 44.1 permits, but does not require, live testimony about foreign law. The court concluded that the submitted statutes, cases, expert opinions, depositions, and rebuttal reports provided a sufficient record.
The Republic also relied on an opinion by Judge Villanueva. The court found that opinion was a belated expert opinion requested by the Republic, was not properly part of the record, and was newly created in response to the court’s ruling rather than newly discovered evidence. The court therefore held that it could not be used as a basis for reconsideration.
The Republic further challenged the court’s determination concerning the prejudgment-interest rate by arguing what an Argentine court would typically do. The court held that this argument did not show that it had abused its discretion or made an obvious error.
The court did, however, allow the Republic to submit evidence that it did not acquire control of YPF’s shares, or temporarily occupy those shares, until May 7, 2012. The court reserved judgment on whether the Republic’s reading of its answer was plausible and stated that the precise date of control would require a trial. It would not allow evidence that the Republic acquired control after May 7, 2012, because the YPF Expropriation Law plainly provided for Republic control by its effective date, as the court had already found.
Ruling
Judge Loretta A. Preska granted in part and denied in part the Republic’s motion for reconsideration. The court allowed the limited evidence concerning whether the Republic controlled YPF shares before May 7, 2012, but rejected the Republic’s other reconsideration arguments. Judge Preska also denied the Republic’s separate letter motion for oral argument as moot. The clerk was directed to close the specified motions, and counsel were directed to report by May 31 whether their positions on how to proceed had changed.
Read the full 10-page opinion on CourtListener, the free public archive maintained by the Free Law Project.