Argentina Challenges $16.1 Billion YPF Ruling in U.S. Appeals Court
NEW YORK (October 29, 2025) — Argentina will ask the 2nd U.S. Circuit Court of Appeals in Manhattan to overturn a $16.1 billion judgment awarded to minority shareholders of its state-controlled energy company, YPF S.A., following the country’s controversial 2012 nationalization of the oil giant.
The appeal, scheduled for review on Wednesday, represents one of Argentina’s largest legal and financial challenges in recent history. U.S. District Judge Loretta Preska had ruled in September 2023 that Argentina must compensate investors Petersen Energia Inversora and Eton Park Capital Management for failing to make a mandatory tender offer after expropriating YPF shares from Spain’s Repsol.
A Decade-Long Legal Battle Over Nationalization
In 2012, then-President Cristina Fernández de Kirchner nationalized 51% of YPF from Repsol, claiming the company failed to meet domestic energy demands. While Repsol was later compensated around $5 billion, minority shareholders Petersen and Eton Park said Argentina’s actions caused them billions in losses.
Judge Preska’s ruling ordered Argentina to pay $14.39 billion to Petersen and $1.71 billion to Eton Park, totaling $16.1 billion after adding 8% prejudgment interest.
The litigation has been largely financed by Burford Capital (BURF.L), a London-based litigation funder, which could earn billions if the plaintiffs succeed.
Argentina’s Legal Arguments: Sovereign Immunity and Jurisdiction
Argentina argues that the U.S. court lacks jurisdiction over the case, insisting that it never waived sovereign immunity and that the dispute should be resolved under Argentine law.
The government also contends that the $16.1 billion judgment—equivalent to 45% of Argentina’s 2024 national budget—is “grossly disproportionate” and economically unsustainable.
Argentina’s legal team claims that Judge Preska misapplied local laws and ignored principles of international comity, which prevent one nation’s courts from overreaching into another’s domestic affairs.
Petersen and Eton Park, however, argue that Argentina’s “flagrant breach of contract” justifies U.S. jurisdiction and that Argentina has used years of procedural delay to avoid accountability.
Milei’s Reform Agenda and the Stakes for Argentina
The outcome carries enormous weight for President Javier Milei, who is attempting to restore Argentina’s fiscal credibility after decades of economic turmoil. Since taking office in December 2023, Milei has implemented sweeping austerity measures, slashed government spending, and achieved the country’s first budget surplus in 14 years.
While inflation has eased to 2.1% monthly, Argentina remains burdened by debt and limited access to international credit markets. A loss in the YPF appeal could undermine Milei’s stabilization program and investor confidence.
To cushion the impact, U.S. President Donald Trump has reportedly offered Argentina a $40 billion bailout, including a $20 billion currency swap and $20 billion debt investment facility — a potential financial lifeline if the judgment stands.
The Broader Legal Context
The appeal also challenges a separate June 30 order by Judge Preska requiring Argentina to turn over its YPF shares to help satisfy the judgment. The 2nd Circuit Court placed that order on hold in August, allowing Argentina to pursue its appeal.
The U.S. government has declined to take a side but warned that forcing Argentina to surrender its YPF assets could harm U.S. foreign policy and expose American entities to similar actions abroad.
The case — Petersen Energia Inversora SAU et al v. Argentina, Nos. 23-7376, 23-7463, and 23-7614 — is expected to take months before a final ruling is issued.
Potential Global Repercussions
If the appellate court upholds the ruling, Argentina could face severe financial strain, potentially prompting further appeals to the U.S. Supreme Court. Analysts warn that such a decision could deter foreign investment in emerging markets and reshape the legal boundaries of sovereign expropriation.
For now, the Milei administration remains defiant. Officials have vowed to “defend Argentina’s sovereignty” while emphasizing that the government will pursue every available legal avenue to overturn what it calls an “unfair and excessive judgment.”
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