US Court Reverses $16.1 Billion Ruling Against Argentina Over YPF Nationalisation
A US appeals court has overturned a $16.1 billion judgment against Argentina linked to the 2012 nationalisation of oil company YPF. The ruling eliminates a massive financial burden for the country and marks a significant victory for President Javier Milei, who called it the 'best possible outcome'. Milei used the moment to criticise former president Cristina Fernández de Kirchner, whose government carried out the expropriation over a decade ago. The case centred on Argentina's 2012 decision to take control of 51% of YPF, which was partly owned by Spanish energy firm Repsol. Founded as a state company in the early 1900s, YPF had been privatised in 1993 before being re-nationalised under Kirchner's administration. Minority shareholders, including Petersen Energia Inversora and Eton Park Capital Management, later sued for compensation, arguing they were harmed by the move.
The lawsuit was heard in the US because YPF was listed on the New York Stock Exchange. Argentina had argued that the case should be resolved in its own courts, warning that an $18 billion payout (including interest) would deepen its financial crisis. A 2023 ruling initially ordered Argentina to pay $16.1 billion, but the 2nd US Circuit Court of Appeals in New York reversed that decision by a 2-1 vote.
The appeals court found that the breach of contract claims by minority shareholders were not valid under Argentine law. Had the judgment stood, much of the money would have gone to Burford Capital, a UK-based firm that funds lawsuits for profit. Repsol itself had already received $5 billion in damages two years after the expropriation, but smaller investors remained uncompensated. The ruling removes a major debt obligation from Argentina's books, aligning with Milei's efforts to stabilise the economy. He has now announced plans to introduce legislation that would restrict future expropriations and ensure better compensation for affected parties. While the decision eases financial pressure, its direct impact on Argentina's inflation or broader debt strategy remains unclear.
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