US appeals court reverses YPF award
A US appeals court has overturned a $16.1 billion judgment against Argentina tied to the 2012 nationalization of oil company YPF, delivering a major legal win for President Javier Milei as he tries to steady the country’s economy. The 2-1 ruling came from the 2nd US Circuit Court of Appeals in New York and reversed a 2023 decision by Judge Loretta Preska of the US District Court for the Southern District of New York.
The case centered on minority shareholders Petersen Energia Inversora and Eton Park Capital Management, which together held a 25.4 percent stake in YPF. They argued that Argentina failed to make a tender offer required under Argentine law when the state took control of 51 percent of the company in 2012. The appeals court said the breach-of-contract claims were not recognizable under Argentine law, undercutting the basis for the huge damages award.
Argentina had argued for years that the case should be heard at home, not in New York, but the US courts kept it in New York because YPF is listed on the New York Stock Exchange. The fight has been expensive and politically sensitive because the award, with interest, had grown to about $18 billion by Argentina’s estimate. Officials warned that payment could have put severe pressure on a country already struggling with debt and inflation.
The ruling also matters because much of the money would likely have gone to Burford Capital, the litigation finance firm backing the shareholders. For Milei, who described the result as the “best possible outcome” on X, the decision removes one of the most immediate legal threats hanging over Argentina’s finances.
YPF remains a symbolically loaded asset in Argentina. Founded in the early 20th century as a state company, it was privatized in 1993 before later returning to state control under then-president Cristina Kirchner, who renationalized it in 2012 and argued the company was failing to produce enough oil and gas for domestic demand.
The legal significance of the decision is substantial because the appeals court did not merely trim the award; it erased the central rationale that supported it. In practical terms, that shifts leverage back toward Argentina and away from the minority shareholders who pursued the case in New York. It also narrows the room for a settlement built around the original $16.1 billion figure, since the appellate ruling has now undercut the basis of that judgment.
The dispute has always been tied to the unusual path the case took through the US courts. YPF trades in New York, which helped anchor jurisdiction there, but the underlying claims arose from Argentina's treatment of the company after the 2012 nationalization. That mix of domestic policy, foreign investors and cross-border finance made the case unusually sensitive from the start. The appeals court's ruling does not erase that history, but it does resolve one of the largest outstanding judgments against the Argentine state.
