U.S. Appeals Court Overturns $16.1 Billion Judgment Against Argentina in YPF Case

By Ginika Igboke 

A divided U.S. appeals court on Friday overturned a $16.1 billion judgment against Argentina stemming from its 2012 seizure of state-owned oil company YPF, delivering a major legal and financial victory to President Javier Milei as he works to stabilize the country’s fragile economy.

In a 2–1 decision, the 2nd U.S. Circuit Court of Appeals in Manhattan ruled that the plaintiffs’ breach of contract claims failed under Argentine law, warranting a reversal of the earlier ruling.

Argentina had been seeking to overturn damages awarded in September 2023 by a lower court to former YPF shareholders, Petersen Energia Inversora and Eton Park Capital Management, who alleged losses tied to the nationalization. The $16.1 billion judgment equaled roughly 45 percent of Argentina’s 2024 national budget, raising concerns it could severely damage an economy already burdened by debt and high inflation.

The country had also appealed a June 2025 order requiring it to turn over its YPF shares to partially satisfy the judgment. With the ruling now voided, the appeals court also vacated that turnover order.

The decision represents a significant setback for Burford Capital, a UK-based litigation finance firm that backed the case and stood to receive a large portion of the award. By the time the appeal was argued in October, the judgment had risen to $18 billion with interest. Following the ruling, Burford’s shares dropped 47 percent in U.S. trading, closing at $4.14.

In a statement, Burford said it expects Petersen and Eton Park to continue pursuing the case, potentially appealing to the U.S. Supreme Court or seeking arbitration. The firm also indicated it may record a non-cash writedown in its first-quarter results, which could affect its ability to raise debt and fund future investments.

“The Second Circuit decision is obviously very disappointing,” said Chief Executive Christopher Bogart. “Unless plaintiffs can overturn this panel decision, investment treaty arbitration remains a viable option.”

Argentina’s legal team welcomed the ruling. Robert Giuffra, a lawyer representing the country, said the decision “entirely vindicates Argentina’s position that the district court misapplied governing Argentine law.” He also criticized Burford’s role in the case, noting it paid approximately €15 million ($17.3 million) for the rights to pursue the claim.

The dispute centers on Argentina’s decision to expropriate 51 percent of YPF shares from Spain’s Repsol for $5 billion without extending a tender offer to other shareholders such as Petersen and Eton Park. YPF had been privatized in 1993, but then-President Cristina Fernández de Kirchner moved to re-nationalize the company in 2012, citing insufficient domestic energy production.

President Milei celebrated the ruling in a post on X, calling it “the best possible outcome” and describing it as a historic legal victory for Argentina.

Economic analysts also welcomed the decision. Roberto Geretto of Adcap described it as “extremely positive,” noting it not only spares Argentina a massive financial burden but also removes uncertainty over control of YPF.

In the original 2023 ruling, U.S. District Judge Loretta Preska found Argentina liable for breaching obligations to shareholders and awarded $14.39 billion to Petersen and $1.71 billion to Eton Park, including damages and interest.

Writing for the appellate majority, Circuit Judge Denny Chin concluded that YPF’s bylaws did not require Argentina to make a tender offer to minority shareholders. He also noted that Argentine expropriation law likely aimed to limit third-party claims and reduce legal fallout from such actions.

“These cases … have undoubtedly interfered with the act of expropriation, even if they did not actually prevent its completion,” Chin wrote.

The appeals court did not address whether the plaintiffs had the right to sue in U.S. courts over actions that occurred in Argentina, nor whether foreign policy considerations should shield Argentina from liability.

Circuit Judge José Cabranes dissented, arguing that greater deference should have been given to the lower court’s findings after years of detailed review, though he acknowledged the strength of the majority’s reasoning.