Repsol sues Argentina over YPF nationalisation
Spain's Repsol oil giant and US firm Texas Yale Capital filed a class action lawsuit against the Argentinean state in New York on Tuesday for "compensatory damages" over the country's May 4 nationalisation of the firm's YPF division.
AFP - Spanish oil giant Repsol said Wednesday it had filed a class action lawsuit in a New York court against Argentina after the country nationalised the company's local unit YPF.
The suit was filed on Tuesday by Repsol and another YPF shareholder, US firm Texas Yale Capital, a Repsol spokesman told AFP.
"We are seeking compensatory damages," he said, without specifying the amount in damages that the company will seek from Argentina.
Argentine President Cristina Kirchner on May 4 signed a bill expropriating 51 percent of YPF's stock from Repsol, its majority shareholder, arguing Repsol had failed to make agreed investments needed to expand domestic production.
Kirchner has argued that the move was justified because Argentina faces sharp rises in its bill for imported oil, and Repsol has failed to make agreed investments needed to expand domestic production.
In its lawsuit, Repsol argues that the Argentine government failed to comply with YPF bylaws which require anyone obtaining a controling stake in the company to offer to buy all of YPF's outstanding shares.
It said "the by-laws expressly provided that the tender offer requirement... applied to any subsequent acquisition of control by Argentina."
"In order to induce US and other investors to purchase shares in the formerly state-owned enterprise, Argentina committed to shareholders that it would not retake control of the company without offering all investors a compensated exit," the lawsuit added, according to a copy obtained by AFP.
"Plaintiffs accordingly seek compensatory damages in respect of Argentina's breach of contract," it added.
Repsol has said it will seek at least $10 billion (7.9 billion euros) in compensation for its expropriated shares, as well as international arbitration to settle the claim.
Argentina counters that Repsol is leaving a $9 billion debt, while in just over a decade it earned more than $15.7 billion, most of it sent overseas and not reinvested.
YPF accounts for 34 percent of Argentina's domestic oil production, 25 percent of domestic gas production and 54 percent of domestic refining, according to the Argentine Oil Institute.