The United States government has expressed interest in the YPF expropriation trial, asking presiding Judge Loretta Preska to postpone a ruling in the country’s ongoing lawsuit against financial firm Burford Capital.

The letter of intent, sent on Monday by the U.S. Department of Justice, outlined that the country is “actively considering” presenting a statement of interest and requested deferring a ruling on whether or not Argentina should hand over its majority stake in the state-owned oil and gas company until such a decision could be made.

In September 2023, Preska ruled that Argentina owed Burford Capital US$16.1 billion in a lawsuit over the country’s 2012 expropriation of most of YPF’s shares. The financial firm requested that Argentina transfer its stakes in YPF — the country currently owns 51% of the company’s shares — as partial payment of that sum.

The financial firm also demands that YPF, which is not part of the original lawsuit, be incorporated in the case. Last week, all parties presented their final written statements on the matter and Preska is now bound to rule on it, although she doesn’t have a legal deadline.

The letter signed by Damian Williams, the United States Attorney for the Southern District of New York, said that the government is legally authorized to send officers from the Department of Justice to lawsuits pertaining to the country’s interests.

“The Government respectfully requests that the Court reserve decision on the pending motion for an injunction and turnover until the United States has had an opportunity to submit any such statement of interest,” said the letter. The U.S. administration will inform the Court of its potential participation in the case no later than November 6, the letter said. That is one day after the U.S. presidential elections.

A source in Argentina’s Treasury Prosecution Office said that the United States is likely to come forward as an amicus curiae. The Office contacted the U.S. State Department through the Foreign Ministry asking it to intervene, the source added.

The YPF case can be traced back to 2012, when the Argentine Congress expropriated 51% of YPF’s shares from Spanish multinational Repsol — its majority shareholder at the time. Three years later, Burford Capital bought the trial rights from two companies who owned part of the 49% remaining shares — Petersen Energia Inversora and Petersen Energía — as well as a third company called Eton Park. Burford considered that Argentina had failed to make a tender offer for their YPF shares in 2012 and took the country to court. Preska ruled in their favor in September.

Burford’s request has several problems. First, the U.S. Foreign Sovereign Immunities Act bars foreign countries’ property from being seized unless they comply with a series of requirements. One of those requirements is that the assets be located in the United States — Argentina’s defense attorneys have argued that YPF shares are in the South American country. However, Burford said Preska’s court could order Argentina to transfer the shares to the Bank of New York Mellon, and then have that bank transfer them to Burford. If successful, it would be an unprecedented interpretation of the U.S. Foreign Sovereign Act and could explain the US government’s interest in the case.

Moreover, the 2012 Expropriation Act says that the government cannot transfer its shares unless two-thirds of Congress approves the decision.

“The U.S. is likely to recommend that Judge Preska refrain from ordering the transfer of YPF shares to the judgment beneficiaries, taking into account the relationship between two allied nations,” said Sebastián Maril, CEO of Latam Advisors LLC, who has been following the case closely. 

“However, I also believe that the U.S. fully understands that a friendly sovereign nation [Argentina] violated local capital market laws. For this reason, I wouldn’t be surprised if they also suggest that Judge Loretta Preska appoint a Special Master [mediator] to help both parties resolve the dispute,” Maril said in a post on X.

Burford Capital also hopes to fold YPF — as well as other state companies and organisms — into the trial, claiming that they are “alter egos” of the national state. Among them, there are satellite company Arsat, airline Aerolíneas Argentinas, energy company Enarsa, and the Central Bank.