Irish court rejects enforcement of $17.5bn claim against Argentina over oil firm nationalisation

Shareholders of an Argentinian oil firm taken into public ownership had successfully pursued a case against the Argentine Republic in the US District Court for the Southern District of New York in 2023, although this judgment is currently under appeal. The shareholders then sought to enforce the judgment in a number of jurisdictions, including Ireland, England and Wales, France, Australia and Canada.

In certain circumstances, where a case is being brought in the Irish courts against a party outside of the jurisdiction, it is necessary to first get permission – ‘leave’ – from the Irish courts to serve the proceedings outside of the jurisdiction. Leave was granted to the shareholders to serve Irish enforcement proceedings on the Argentine Republic, but the Argentine Republic brought an application to have that order set aside.

Ms Justice Eileen Roberts in the Irish Commercial Court set aside the order granting the shareholders leave to serve the Irish enforcement proceedings on the Argentine Republic – described by Justice Roberts as “the largest claim ever sought to be recognised and enforced by the Irish courts”.

The shareholders had been pursuing a claim worth $17.5bn including interest.

Justice Roberts’ rejection (77-page / 600KB PDF) came after ruling the plaintiffs had not demonstrated a “practical benefit” from enforcement proceedings in Ireland, in part because there were no current assets in Ireland – and none likely to come into the jurisdiction – against which enforcement could be taken.

The ruling also highlighted comments made by the plaintiffs’ litigation funder in the US proceedings which indicated that the purpose of the enforcement proceedings may have been to reach a settlement with Argentina, rather than directly enforcing the $17 billion award. The court’s view was that this demonstrated that there was no real practical benefit likely to be obtained from permitting enforcement proceedings to be taken in Ireland. The court was mindful that allowing the action to proceed would divert resources away from cases where the court’s intervention would have a real and meaningful practical impact on the outcome of the litigation before it.

“A lengthy and costly enforcement hearing in Ireland - a jurisdiction with which the substantive proceedings have no connection whatsoever - would, in my view, place a significant burden on the Irish courts,” she wrote in the ruling.

Lisa Carty, a litigation expert with Pinsent Masons in Dublin, said: “The judgment highlights that the Irish courts will look for a genuine, practical benefit to the plaintiff when determining whether to enforce a foreign judgment.

“Where there is no evidence of assets in the jurisdiction or a strong Irish connection, the courts may refuse to give leave for service outside the jurisdiction for enforcement purposes. It is a reminder that enforcement strategies should be grounded in realistic prospects of recovery, rather than in what might be perceived to be tactical advantages,” she said.