A United States Court of Appeals in Manhattan overturned on Mar. 27 a $16.1 billion judgment against Argentina in the legal dispute over the privatization of oil company YPF.
The decision is significant because it means Argentina will not have to pay damages previously awarded to former YPF shareholders, ending a decade-long litigation process and confirming the legality of the company’s nationalization.
According to the ruling, “the judgment entered by the district court in favor of plaintiffs on their breach-of-contract claims against Argentina is reversed” and “we affirm the district court’s judgment in favor of YPF.” The appeals court also ordered further proceedings consistent with its opinion, effectively concluding this stage of the case.
President Javier Milei welcomed the news with a brief statement: “Ganamos en el juicio de YPF.” In a subsequent speech, Milei said: “Le hemos ganado a Woodford en Estados Unidos, hemos logrado que Argentina tenga que evitar el pago de 18.000 millones de dólares,” and criticized those responsible for the expropriation that was upheld by US courts. He added: “Tuvimos que venir a arreglar las cagadas que hizo el inútil, imbécil, incompetente de Kicillof durante el segundo gobierno de la corrupta y presidiaria Cristina Fernández de Kirchner.” Milei attributed part of this outcome to his trips to the United States and relationship with former President Donald Trump: “Ah pero los viajes de Milei, ah pero el mameluco. Acá está la gestión.”
YPF was nationalized in 2012 during Cristina Kirchner’s presidency after years under private ownership by Repsol. Since then, production at the state oil company increased significantly. The appeals decision reverses compensation ordered by Judge Loretta Preska in September 2023 for former shareholders Petersen Energía Inversora and Eton Park Capital Management over losses related to nationalization.
Judge Preska had previously found that Argentina breached obligations toward Petersen and Eton Park and ordered payments totaling more than $16 billion including damages and interest. An additional order requiring transfer of YPF shares was also overturned by this new ruling.
The appellate judges accepted arguments from Argentina’s legal team that corporate bylaws are multilateral organizational contracts rather than bilateral ones permitting lawsuits. They also cited Argentine law prohibiting third-party actions that could obstruct expropriations or their effects.
While upholding much of Argentina’s defense—including rejection of promissory estoppel claims under Argentine law—the panel noted it did not rule on whether litigation should have occurred within Argentina itself but observed that promises made by Argentina had influenced foreign investment decisions during earlier decades.
The case now returns to district court for further action consistent with this opinion.
