U.S. Appeals Court Questions $16.1 Billion Judgment Against Argentina Over YPF Seizure

A U.S. appeals court on Wednesday signaled a potential reversal of a $16.1 billion judgment against Argentina for its 2012 nationalization of state oil company YPF, suggesting the case may not belong in the United States. Two judges on the Second U.S. Circuit Court of Appeals in Manhattan expressed concern that the dispute, rooted in Argentine law, should have been heard in Argentina. The massive award, granted in 2023 to former YPF shareholders Petersen Energia Inversora and Eton Park Capital Management, was based on Argentina’s failure to make a tender offer during its expropriation of YPF shares from Spain’s Repsol.

If overturned, the ruling would be a major setback for UK-based litigation funder Burford Capital, which financed the lawsuit and stood to gain significantly from the award. Burford’s shares plunged nearly 15% in New York after judges Denny Chin and Jose Cabranes questioned whether the U.S. courts were the appropriate venue. Argentina’s lawyer, Robert Giuffra, described the judgment as “life-threatening to the country,” noting it represented nearly half of Argentina’s 2024 budget and likening it to ordering the U.S. to pay $2 trillion.

President Javier Milei’s government, already battling triple-digit inflation and a debt-laden economy, fears the judgment could derail fragile financial stability. Milei, who has implemented sweeping austerity measures and recently achieved Argentina’s first budget surplus in 14 years, has received public support from U.S. President Donald Trump, including talk of a potential $40 billion bailout package. The appeals court has not indicated when it will issue a decision, though complex cases like this typically take several months to resolve.

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