By Jonathan Stempel
NEW YORK (Reuters) – Argentina urged a U.S. judge not to enforce a $16.1 billion judgment arising from the government’s 2012 seizure of a majority control in state-controlled oil company YPF, while the cash-strapped country appeals the judgment.
In a Thursday night filing with the U.S. District Court in Manhattan, Argentina said enforcing the “truly overwhelming” judgment or requiring that it post bond would “cripple a nation already suffering from severe inflation and drought.”
Argentina said enforcing the judgment, equal to nearly 20% of its budget, would make it harder for the country to stabilize its currency and reduce its $235 billion debt burden.
It also said enforcement would cause “serious hardship” to its more than 45 million people, making it more difficult to provide energy, health, transportation, water and sewage and other services.
The judgment arose from Argentina’s decision to seize in April 2012 a 51% YPF stake held by Spain’s Repsol, saying underinvestment justified the takeover, without tendering for shares held by minority investors.
Two investors, Petersen Energia and Eton Park Capital Management, sued, and last month U.S. District Judge Loretta Preska awarded them the $16.1 billion including interest.
Burford Capital, which funded the litigation and last month said it was entitled to a respective 35% and 73% of Petersen’s and Eton Park’s damages, has called Preska’s decision a “complete win.”
Argentina had argued it should pay no more than $4.92 billion. Repsol ultimately received about $5 billion of compensation.
Lawyers for Petersen and Eton Park did not immediately respond to requests for comment on Friday.
Preska would decide whether to stay enforcement of the judgment while Argentina appealed to the 2nd U.S. Circuit Court of Appeals in Manhattan.
The country is struggling with more than 100% inflation, scarce foreign exchange reserves, and rising poverty.
It will next month hold a presidential election runoff between Sergio Massa, economy minister of the ruling center-left Peronist coalition, and Javier Milei, a far-right libertarian economist.
Massa’s first-place finish in Sunday’s general election was a surprise. Milei had been leading many opinion polls.
(Reporting by Jonathan Stempel in New York; editing by Jonathan Oatis)