YPF case: Argentina requests discovery be halted pending resolution of appeal

The Argentine Treasury Attorney General’s Office filed a formal request with the Southern District Court of New York to suspend the discovery process ordered by the court as well as the contempt motion filed by Burford Capital in the ongoing trial over the 2012 expropriation of state-owned energy company YPF. In a statement sent to Judge Loretta Preska, the government based its request on the fact that Burford is “doubling down on their requests for increasingly intrusive and irrelevant discovery.”  They added that this is taking place despite the fact that, for the past two years, the country has “produced anything that could reasonably lead to identification of its executable assets.”  The text went on to say that, despite all this, the plaintiffs continue with their demands because their actual goal is not obtaining asset-related discovery but to “throw sand in the gears” of economic recovery, “harass the Republic into settling, or force Argentina into contempt and inflict corresponding reputational harm.” The dispute stems from the legal battle Argentina has been waging against Burford Capital in U.S. courts over the expropriation for more than a decade now.  In 2023, Judge Loretta Preska ruled that the country had breached its contract and ordered it to pay US$16.1 billion, a judgment Argentina’s lawyers have appealed. Wednesday’s filing comes on the heels of the Argentine government’s refusal on Tuesday to disclose the location and movements of the Central Bank’s gold reserves. The denial was in response to a request made by Burford that the gold be considered part of the country’s assets and used as partial payment.  Regarding the gold, the Treasury’s statement is in line with the government’s position. In essence, they argue that the gold belongs to the Central Bank, which is a separate entity from the government. The hedge fund, meanwhile, claims that the monetary authority is an “alter ego” of the administration. Burford has also accused Argentina of “concealing more than US$1 billion in gold reserves,” but the government’s legal representatives said that is false. The Argentine government responded by saying that “nothing has been ‘concealed’”.  “The [Central Bank] publishes information about the amount of the gold reserves it holds,” Argentina’s letter said, adding that the country “has repeatedly explained that all gold reserves are the property of and managed by the Central Bank,” which is a “legally separate and distinct” entity from the government.