New York – Spanish energy major Repsol has sued Argentina in a New York court over its seizure of a 51 percent stake in Buenos Aires-based oil firm YPF.
The class-action suit was filed by Repsol and another YPF shareholder, U.S.-based financial investment advisory firm Texas Yale Capital Corporation.
Attorneys for the Spanish group in New York are seeking to have the court force the Argentine government to make an offer to buy all of YPF's outstanding Class D shares in the wake of its decision to expropriate the controlling stake from Repsol.
Argentina announced plans for the takeover on April 16 and a bill formalizing the nationalization was signed into law earlier this month.
Repsol alleges in the 27-page suit that the Argentine government breached its contractual obligations to other shareholders by failing to make the offer in seizing YPF, Argentina's largest oil producer.
The Spanish company has asked that the price of the offer be set in accordance with the law.
Repsol's attorneys have added that until that offer is made the Argentine government cannot exercise its voting rights attached to the nationalized shares and faces other restrictions.
Separately, Repsol on Tuesday made an initial move toward invoking international arbitration over the expropriation, sending a letter to Argentine President Cristina Fernandez formally proclaiming a dispute over the seizure.
The move means that if the parties don't reach an accord on compensation within six months, Repsol will take the case to the World Bank's International Center for Settlement of Investment Disputes, sources in the Spanish firm told Efe on Tuesday.
Prior to Argentina's decision to seize control of YPF, Repsol had been the controlling shareholder with a 57.4 percent stake, which the Spanish company's chairman, Antonio Brufau, has valued at $10.5 billion.
YPF's new administrators, however, have hinted the government will not pay that much and are auditing the firm's finances amid concerns about a lack of investment and fuel shortages.
Repsol, whose current stake in YPF stands at around 6 percent, says the nationalization violates a bilateral treaty on protection of investments.
The Argentine federal government is keeping just over half of the controlling 51 percent stake in YPF, with the remainder to be divided among the country's oil-producing provinces.
Argentina's Grupo Petersen still holds a 25.46 percent interest and another 17.09 percent of the shares continue to be traded on the Buenos Aires and New York stock exchanges.
Repsol has said the recent discovery of massive unconventional shale gas and oil reserves in west-central Argentina was behind the move to seize control of the firm and has denied Buenos Aires' accusations that YPF's dividend policy sapped it of the resources it needed to invest and meet the country's energy needs.
It also has said energy companies in Argentina have been discouraged from investing due to regulated fuel and electricity prices.
The Spanish government has blasted the expropriation move and retaliated by announcing plans to limit imports of Argentine biodiesel.
Madrid said it also will pursue "measures of a diplomatic nature" in various international forums in response to the takeover.