First Tuesday Update is our monthly take on current issues in commercial disputes, international arbitration, and judgment enforcement. In this update, we look at the ongoing Argentine debt crisis and ongoing efforts to enforce judgments entered against Argentina. Such litigation is particularly topical since, less than a week ago, the Executive Board of the International Monetary Fund completed its first review of Argentina's $20 billion bailout and voted to approve a $2 billion disbursement. Unfortunately for Argentina's creditors, the IMF is immune from most judicial processes, including garnishment, and Argentina is likely taking steps to ensure that these funds will not remain outside its borders for long (or at all) once they leave the IMF. It appears that the package is being used to replenish BRCA's foreign exchange reserves to enable Argentina to loosen capital controls imposed in 2019 and implement a more flexible exchange-rate regime. As of now, there is not yet an indication that the funds are to be used for debt repayment.
Below, we will also provide brief updates on ongoing topics of interest – Crystallex and the possible sale of CITGO, and the UK Arbitration Act and Enforcement Treaty.
Petersen Energia Invesora
Of the most immediate concern to Argentina, efforts are heating up to collect on the $16 billion judgment entered in September 2023 by Judge Preska of the Southern District of New York in Petersen Energia Invesora S.A.U. et al. v. Argentine Republic et al. The judgment in Petersen arises out of Argentina's partial nationalization of YPF, a formerly state-owned oil company that had been privatized in 1999. As part of the privatization process, Argentina and YPF assured prospective investors that they would not be stranded as minority shareholders in a government-run enterprise by enacting YPF bylaws requiring a tender offer to minority shareholders to be made if Argentina ever reacquired a controlling interest in the company. Argentina did just that in 2012, but no tender offer was ever made, which led the Petersen Plaintiffs, backed by Burford Capital, to sue Argentina in New York federal court.
Argentina's appeal from the $16 billion judgment is still pending. Nearly a year after briefing was completed, the Second Circuit has yet to schedule oral argument. However, since the judgment was not stayed, there has been substantial activity before the district court.
Within the last week, the usual sparring over issues related to post-judgment discovery—search terms, document custodians, and the like—has taken an intriguing turn. Specifically, during a July 29 hearing, Judge Preska ruled that Argentina will need to produce Gmail, WhatsApp, and Signal messages from the personal accounts of current and former senior government officials, including Argentina's current Economy Minister.
In addition to seeking discovery directed towards identifying assets subject to execution, the Plaintiffs in Petersen have sought to use New York's CPLR 5225—which, as construed by the New York Court of Appeals, allows courts to order judgment debtors to turn over intangible assets located anywhere in the world—to force Argentina to hand over its YPF shares. YPF's current market capitalization is approximately $13 billion, and Argentina still owns 51% of the company. Judge Preska granted Plaintiffs' request on June 30, 2025, but as described below, that decision is currently stayed while the Second Circuit addresses the matter.
Argentina, unsurprisingly, has vigorously resisted Plaintiffs' attempt to reach YPF shares worth billions of dollars. Among other things, Argentina has argued that its YPF shares enjoy enforcement immunity under the Foreign Sovereign Immunities Act. Argentina has also argued that compelling turnover pursuant to CPLR 5225 would be contrary to principles of international comity because, per Argentina, its laws require legislative approval for any transfer of Argentina's YPF shares.
In November 2024, the US government filed a statement of interest supporting Argentina's position. In that statement, the government laid out its position that the Foreign Sovereign Immunities Act, common law principles of sovereign immunity, and comity concerns mean that, as a matter of law, CPLR 5225 cannot be used to require the turnover of sovereign property located abroad. The government noted in its submission, however, that Judge Preska had already addressed this issue in a prior case, Bainbridge Fund Ltd. v. Republic of Argentina, 690 F. Supp. 3d 411, 420 (S.D.N.Y. 2023).
When Judge Preska granted Plaintiffs' turnover motion, she rejected the federal government's views adhering to her prior opinion in Bainbridge, but she addressed Argentina's position comprehensively. Beginning with execution immunity, she explained that while Argentina's YPF shares are located in Argentina, they are still "used for a commercial activity in the United States," as required by the FSIA's waiver of sovereign immunity. 28 U.S.C. § 1610(a). That is so, per Judge Preska, because Argentina uses its controlling interest in YPF to direct the company's commercial activities in the United States, which include listing its shares on the New York Stock Exchange and selling its debt to institutional investors in the United States under SEC Rule 144A. Judge Preska also explained that the YPF shares were "used for the commercial activity upon which the claim is based," 28 U.S.C. § 1610(a)(2), in that once Argentina acquired a controlling interest in YPF by acquiring the shares, it used that control to ensure that YPF would not offer minority shareholders a compensated exit.
Turning to international comity, Judge Preska reasoned that there was no true conflict between Argentine law and US law and in any event "[i]f comity could supersede the FSIA and allow foreign law to control which sovereign assets are subject to execution, every foreign state could render itself judgment-proof in United States courts just by passing a law requiring its own approval for any transfer of its property." Judge Preska also expressed none-too-subtle frustration with Argentina's litigation conduct. "While the Republic demands that this Court extend comity, it simultaneously refuses to make any effort to honor the Court's unstayed judgment. . . . Comity is not a one-way street."
Two weeks later, Judge Preska denied Argentina's request to stay her turnover order so that it could seek appellate review. Per Judge Preska: "The Republic has abused the Court's accommodations and thus will not be given additional ones."
Argentina then sought a stay from the Second Circuit. The Second Circuit has not yet acted on that request, which was fully briefed as of July 22, but Plaintiffs have agreed to an "administrative" stay until the Second Circuit acts. The Second Circuit has set Argentina's stay application for oral argument on August 12.
GDP-Linked Securities
Another looming issue for Argentina is enforcement of a judgment obtained in April 2023 by investors holding GDP-linked securities issued by Argentina in 2005 and 2010. Those investors obtained a London High Court judgment against Argentina for €1.33 billion. That judgment was based on allegations that Argentina manipulated published GDP data to avoid making payments to securities holders. The judgment became final in October 2024 when the appellate process in the UK concluded.
On June 23, 2025, the Plaintiffs filed an action in the United States District Court for the District of Columbia seeking to domesticate their UK judgment against Argentina. That action is still in its early stages—Argentina has not even entered an appearance—but it is apparent that there will be an attempt to satisfy the UK judgment via the US courts.
The case recently filed in DC is the second time that claims based on Argentina's GDP-linked securities have been brought in US federal court. In 2019, Aurelius Capital Management and several other hedge funds filed suit in the Southern District of New York alleging that Argentina manipulated published GDP data to avoid making payments to securities holders in 2013. Those cases, like the YPF litigation, were assigned to Judge Preska, who granted summary judgment to Argentina in March 2024 after Argentina flagged, for the first time at summary judgment, that Plaintiffs had not given contractually required pre-suit notice.
Plaintiffs filed an appeal, but in September 2024—while the appeal was still pending—they refiled their claims in the district court, claiming to have provided the contractually required pre-suit notice that doomed their initial action. In the refiled action, Plaintiffs relied on CPLR 205(a), which gives litigants the opportunity to fix procedural defects by allowing them to refile within six months after a case is "terminated" for most non-merits reasons notwithstanding otherwise applicable statutes of limitations. Without CPLR 205(a), Plaintiffs' claims would plainly be time barred; New York's applicable statute of limitations is six years, and the cause of action arose in 2013.
Argentina moved to dismiss the refiled action, arguing that CPLR 205(a) did not apply because the initial action was still pending appeal and therefore had not been "terminated." Instead of litigating the issue, Plaintiffs agreed to dismiss the refiled action suit in exchange for an agreement from Argentina that the initial action would be deemed "terminated" six months after the Second Circuit issued its appellate mandate.
All that history matters going forward because the Second Circuit issued a summary order two-and-a-half weeks ago affirming Judge Preska's decision to dismiss the initial action. Plaintiffs will, presumably, take a third bite at the apple in the coming months.
New UK Arbitration Act
In our First Tuesday Update in June, we wrote about the changes being introduced by the new UK Arbitration Act 2025. The UK government has now confirmed that the Act came into force as of August 1, 2025. Our article discussing those changes can be found here.
UK Enforcement Treaty
Our First Tuesday Update in October 2024 discussed a significant development in the UK enforcement landscape following the UK's ratification in June 2024 of the Hague Convention on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters. That Convention came into force as of July 1, 2025. Our article discussing its implications can be found here.
Crystallex and the Sale of Citgo
We have previously covered the ongoing judicial sale of Citgo's parent company in the United States District Court for the District of Delaware, Crystallex v. Bolivarian Republic of Venezuela, No. 17-mc-151-LPS (D. Del.). (See articles discussing the sale and its implications here, here, here, here, and here.) Events are moving to a head in August, with a sale hearing currently scheduled for August 18. To recap, the Special Master opened a period of stalking horse bidding earlier in the year. The top two bids were Gold Reserve and Red Tree, for approximately $7.1 billion and approximately $3.7 billion, respectively. The Special Master selected Red Tree as the stalking horse, despite its lower top-line bid, because it had reached a settlement agreement with the holders of the PDVSA 2020 bonds. (Our article discussing the implications of the PDVSA 2020 bond case can be found here.) After a topping period, the Special Master chose price over certainty and recommended Gold Reserve (through its subsidiary Dalinar Energy), with a bid of $7.38 billion, as the successful bidder. The PDVSA 2020 Bondholders promptly sought a hearing in the Southern District of New York, informing that court that they planned to file for an injunction if Judge Stark, in Delaware, accepted the Special Master's recommendation of Dalinar and asking for a briefing schedule.
Objections are presently being briefed in Delaware, with a status report due on August 11 and a conference on August 13 before the three-day sale hearing begins on August 18. Depositions of witnesses who parties intend to call during the sale hearing have also been taking place in Delaware. Meanwhile, Judge Failla in New York spoke with Judge Stark in Delaware at length, then denied without prejudice the motion for a schedule and ordered the United States to file either a statement of interest, or a letter advising her that it does not intend to file a statement of interest, by August 29, 2025. The role of the US government—and particularly OFAC—will be crucial for the final resolution of both cases.
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