Court overturns a multibillion-dollar judgment tied to the 2012 nationalization
Argentina has won a major legal victory in the United States after a federal appeals court overturned the 16.1 billion dollar judgment linked to the 2012 seizure of oil company YPF. The ruling marks a significant turn in one of the most closely watched sovereign litigation battles in recent years and removes, at least for now, a financial threat that had loomed heavily over the country’s already fragile economic position.
The appeals court ruled by a 2-1 margin that the plaintiffs’ breach of contract claims failed under Argentine law. That conclusion was enough to reverse the lower court judgment that had awarded damages to former YPF shareholders Petersen Energia Inversora and Eton Park Capital Management. Because the main judgment was voided, the related order requiring Argentina to hand over YPF shares to partially satisfy the award was also set aside.
The decision is a major relief for President Javier Milei, who is trying to stabilize an economy long burdened by debt, inflation and repeated crises of confidence. The original judgment was so large that Argentina had warned it could severely damage the country’s finances. In that sense, the ruling is not only a legal win, but also a meaningful economic reprieve.
The case centered on YPF’s 2012 re-nationalization
The dispute goes back to Argentina’s decision in 2012 to take control of 51% of YPF from Spain’s Repsol. At the time, then-president Cristina Fernández de Kirchner argued that the company should return to state control because it was not producing enough oil and gas to meet domestic needs. That move, however, triggered years of litigation over whether other shareholders should have received a tender offer under the company’s bylaws.
The plaintiffs argued that Argentina breached those obligations when it expropriated the controlling stake without extending the same treatment to other investors. A lower court accepted that position in 2023 and awarded damages on a massive scale, with the total later rising further as interest accumulated.
The appeals court has now rejected that legal foundation. The majority concluded that YPF’s bylaws did not require Argentina to make the tender offer the plaintiffs claimed was owed. It also found that Argentine expropriation law blocked the type of third-party claims that had helped drive the earlier judgment.
The reversal is a sharp blow to Burford Capital
While Argentina celebrated, the ruling hit Burford Capital especially hard. The litigation finance group had backed the case and stood to collect a large share of the award if the judgment had been upheld. Instead, the reversal wiped out the legal outcome on which much of that expectation depended.
The market reaction reflected that shock immediately. Burford’s shares fell sharply in U.S. trading after the decision, showing how central the YPF case had become to investor expectations around the company. The result also revives a familiar debate over litigation finance, especially in cases where investors fund claims against sovereign states in search of outsized returns.
Argentina’s legal team made that criticism explicit, portraying the case as an attempt to turn U.S. courts into a venue for speculative gains based on an interpretation of Argentine law that the appeals court ultimately did not accept. That argument is likely to remain politically potent in Argentina, where the case had long been seen not only as a legal dispute, but as a matter touching national sovereignty and control over strategic energy assets.
The outcome matters beyond the courtroom
The significance of the ruling goes well beyond the parties directly involved. For Argentina, it removes a huge source of uncertainty over YPF, a company that remains central to the country’s energy ambitions and broader economic strategy. The reversal also helps ease fears that control over the company could become entangled in enforcement actions tied to the judgment.
For international investors, the case is another reminder of how politically sensitive state interventions in strategic sectors can evolve into years of legal conflict across multiple jurisdictions. It also shows how difficult it can be to translate those disputes into enforceable judgments, especially when local law, sovereign acts and foreign court systems collide.
The appeals court did not resolve every major issue raised by the case, which means some legal questions remain open. But the practical result is unmistakable. Argentina has escaped, for now, one of the heaviest legal and financial blows hanging over its economy. For Milei, that makes the ruling one of the most important external victories of his presidency so far, not only because of the money involved, but because it restores room to maneuver at a moment when the country can least afford another destabilizing shock.