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Case Developments Commercial

Parties in Burford-Funded Argentina Claim Remain Far Apart on Payout Amount 

August 3, 2023

Parties in Burford-Funded Argentina Claim Remain Far Apart on Payout Amount 

Cases with a prolonged duration and timelines that span nearly a decade are not uncommon for those in the business of litigation finance. However, even in cases where claimants receive a favourable judgement, there is always the issue of determining the size of the award, which further prolongs these lawsuits. A recent article by Bloomberg Law provides an update on the three-day trial in the case of Petersen Energia Inversora, S.A.U. v. Argentine Republic, which ended with the opposing parties still $6.5 billion apart on what they think the proposed payout should be. The case, which dates back to 2015, was brought on behalf of YPF SA shareholders, who argued that the Argentine government failed to offer a required payout after it re-nationalized the oil company in 2012.  As LFJ previously reported, Judge Loretta A. Preska ruled that Argentina was liable for the shareholders’ losses in a summary judgement in March of this year. During last month’s trial in the Southern District of New York, the shareholders argued that the payout could amount to as much as $16 billion, whilst Argentina provided a much lower estimate of $9.5 billion. The significant distance between the two amounts revolved around a number of key issues, including the date that the government took back control of YPF, with the two parties specifying dates that are three weeks apart.  The outcome of the trial has particular significance for Burford Capital who invested $16.6 million in the litigation, and following the March judgement, had stated that the final award could total in excess of $7.5 billion. This figure is notably lower than Argentina’s proposed payout. However, Judge Preska provided no estimate of when she might deliver a ruling on the payout and attorneys for the Argentine government have already made clear that they will appeal the award, regardless of the Judge’s ruling.

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Case Developments Commercial

Privy Council to Hear High-Profile Appeal on Third-Party Funding

By John Freund |

The United Kingdom's Judicial Committee of the Privy Council is set to hear a closely watched appeal that could have wide-ranging implications for third-party litigation funding in international arbitration. The case stems from a dispute between OGD Services Holdings, part of the Essar Group, and Norscot Rig Management over the enforcement of a Mauritius-based arbitral award. The Supreme Court of Mauritius had previously upheld the award in favor of Norscot, prompting OGD to seek review from the Privy Council.

An article in Bar & Bench reports that the appeal is scheduled for next year and will feature two prominent Indian senior advocates: Harish Salve KC, representing Norscot, and Nakul Dewan KC, representing OGD. At issue is whether the use of third-party funding in the underlying arbitration renders the enforcement of the award improper under Mauritius law, where third-party litigation funding remains a legally sensitive area.

The case is drawing significant attention because of its potential to shape the international enforceability of funding agreements, particularly in light of the UK Supreme Court's 2023 PACCAR decision. That ruling dramatically altered the legal landscape by classifying many litigation funding agreements as damages-based agreements, thereby subjecting them to stricter statutory controls. The PACCAR decision has already triggered calls for legislative reform in the UK to preserve the viability of litigation funding, especially in the class action and arbitration contexts.

The Privy Council appeal will test the legal boundaries of funder involvement in arbitration and may help clarify whether such arrangements compromise enforceability when judgments cross borders. The outcome could influence how funders structure deals in jurisdictions with differing attitudes toward third-party involvement in legal claims.

Case Developments Commercial

Banks Win UK Supreme Court Victory in $3.6B Forex Lawsuit

By John Freund |

Several major global banks, including JPMorgan, UBS, Citigroup, Barclays, MUFG, and NatWest, have successfully blocked a £2.7 billion ($3.6 billion) opt-out collective action in the UK’s Supreme Court. The proposed lawsuit, led by Phillip Evans, aimed to represent thousands of investors, pension funds, and institutions impacted by alleged foreign exchange (forex) market manipulation.

An article in Yahoo Finance reports that the case stemmed from earlier European Commission findings that fined multiple banks over €1 billion for operating cartels in forex trading. Evans’ action, filed under the UK’s collective proceedings regime, sought to recover damages on behalf of a wide investor class. However, the Supreme Court upheld a lower tribunal’s decision that the claim could not proceed on an opt-out basis, requiring instead that individual claimants opt in.

The judgment emphasized the insufficient participation rate among potential class members and found that an opt-out mechanism was not appropriate given the specifics of the case. Justice Vivien Rose, delivering the court’s opinion, noted that while individual claims might have merit, the representative structure lacked the cohesion and commitment necessary to justify a mass claim. As a result, the banks have succeeded in halting what would have been one of the largest collective actions in the UK to date.

Case Developments Commercial

Archetype Capital Partners Secures Injunction in Trade Secret Battle with Co‑Founder

By John Freund |

A significant legal win for litigation funder Archetype Capital Partners emerged this month in the firm’s ongoing dispute with one of its co‑founders. A Nevada federal judge granted Archetype a preliminary injunction that prevents the ex‑partner from using the company’s proprietary systems for underwriting and managing mass tort litigation while the underlying trade secret lawsuit continues.

According to an article in Bloomberg, Archetype filed suit in September against its former co‑founder, Andrew Schneider, and Bullock Legal Group LLC, alleging misappropriation of confidential methodologies and business systems developed to assess and fund mass tort claims. The complaint asserted that Schneider supplied Bullock Legal with sensitive documents and leveraged Archetype’s systems to rapidly grow the firm’s case inventory from a few thousand matters to well over 148,000, a jump that Archetype says directly undercut its competitive position.

In issuing the injunction, Judge Gloria M. Navarro of the U.S. District Court for the District of Nevada found that Archetype was likely to succeed on its trade secret and breach of contract claims. While the court determined it lacked personal jurisdiction over Bullock Legal and dismissed the company from the suit, it nonetheless barred both Schneider and Bullock from distributing proceeds from a $5.6 billion mass tort settlement tied to video game addiction litigation that had been structured using Archetype’s proprietary systems.

The order further requires the return of all materials containing confidential data and prohibits Schneider from soliciting or interfering with Archetype’s clients.