After eight years in the presidency, Cristina Fernández de Kirchner’s last year has been marked by a series of on-going negative factors including an economic recession in early 2014 (-1.7% according to the IMF), high inflationary pressure (more than 40%) and a considerable public debt aggravated by a partial default (for the second time in 13 years), following the country’s failure to pay $539m in interest to bondholders.
The country’s ongoing inability to access international capital markets, in conjunction with restrictive international trade measures, currency controls and a raft of other norms has ensured that Argentina remains a risky investment destination – a perception exacerbated by the nationalisation of YPF in 2012. In fact, according to the Economic Commission for Latin America and the Caribbean (ECLAC), foreign direct investment into Argentina declined 41 per cent in 2014 (the least the country has received since 2009). Despite these obstacles, President Kirchner has found new international partners and, controversially, signed more than 15 agreements with China for the development of joint economic, cultural and technological projects including the construction of nuclear reactors, dams, railroads and even a satellite tracking station for China’s eventual missions to the moon. An $11bn currency swap and other economic cooperation and investment agreements are expected to stabilise the country’s falling reserves.
In spite of the adverse economic, social and political scenario, Argentina continues to be an economically important nation due to its wealth in natural resources and agricultural production, remaining the third-largest producer of soybean in the world and a very solid exporter of biodiesel. In the hydrocarbons sector, Argentina is at the forefront of gas production in Latin America, and foreign interest in the Vaca Muerta shale oil basin continues to attract relevant players, with Petronas and YPF’s $550m deal to drill fields in said basin making headlines. Regulatory developments in the area include an amendment to the hydrocarbons law that is expected to boost the exploration and production of conventional and unconventional hydrocarbons.
The legal market is on tenterhooks awaiting the results of the Presidential elections later this year, which is expected to bring positive changes and a more-market friendly government. Nonetheless, the market remains active and highly competitive.
At the pinnacle of the legal market is the nation’s giant Marval, O’Farrell & Mairal, jointly with a series of other sizeable full service firms including Pérez Alati, Grondona, Benites, Arntsen & Martínez De Hoz, Jr, Bruchou, Fernández Madero & Lombardi, M & M Bomchil, Allende & Brea, Estudio Beccar Varela, and Baker & McKenzie, all of them grasping a good part of the country’s high-value legal work. Deserving a special mention is Mitrani, Caballero, Ojam & Ruiz Moreno, which stands out for its permanent involvement in highly complex and sophisticated matters working for its client Techint; and Estudio O’Farrell for its strong market presence as a result of the extensive activity of client YPF.
There is a considerable portion of the legal market that is taken by niche firms: Estudio Alegría, Buey Fernández, Fissore y Montemerlo and Rivera & Asociados shine in the bankruptcy and litigation areas; Cassagne Abogados in public law; Heredia, Lede Pizzurno & Terrel Abogados (HOLT) in the mining sector; Estudio Bec for environmental law; Funes De Rioja & Asociados for labour and employment; G. Breuer for IP; and Teijeiro & Ballone, Abogados for tax.
The difficult times have not prevented the emergence of new firms and Cerolini & Ferrari Abogados made its debut in 2014. Formed by Agustín Cerolini and Matías Ferrari former senior associates at Bruchou, Fernández Madero & Lombardi, the firm focuses its practice on banking and finance, corporate and litigation matters. Joaquín Kersman left Baker & McKenzie to establish new tax boutique KGMlaw. On another front, Negri Busso & Fariña split into two new firms: Busso & Fariña and Negri & Pueyrredon Abogados.