Repsol starts legal action against YPF expropriation

Leading Spanish oil firm Repsol said Tuesday it had initiated its legal battle to secure compensation from the government of President Cristina Fernández de Kirchner for the seizure of its Argentinean unit YPF.

It said it had notified the Fernández administration of the existence of a dispute under the Investment Promotion and Protection Treaty between Spain and the Latin American country, which is expected to result in arbitration by the World Bank’s International Center for Settlement of Investment Disputes.

Prior to the case going to arbitration, Repsol and the Argentinean government have six months to try to reach a negotiated settlement. Repsol claims that Argentina has violated a number of regulations stipulated in the bilateral treaty signed with Spain.

“With this notification, Repsol has formally announced the immediate start of legal actions under international law for [the seizure of YPF] to be declared illegal and for Argentina to be ordered to return [it] and/or make full reparation for damages and harm that may have been caused,” Repsol said in a statement.

The government last month seized a 51-percent stake in YPF held by Repsol. The Spanish firm retains a further 6.4 percent of the company. Repsol is looking for compensation of about eight billion euros for the loss of the stake, but Argentina has disputed this figure.