A U.S. appeals court handed Argentina a massive legal victory on Friday, striking down a $16.1 billion judgment tied to the country’s 2012 takeover of state oil company YPF. For President Javier Milei, the ruling removes a financial threat that could have crippled an already 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. As a result, the court reversed the original verdict entirely.
The case dates back to Argentina’s decision to expropriate 51% of YPF’s shares from Spain’s Repsol for $5 billion. At the time, then-President Cristina Fernandez de Kirchner argued that YPF needed to return to state control because it wasn’t producing enough oil and gas to meet domestic demand. However, the government never made a tender offer to YPF’s second- and third-largest investors — Petersen Energia Inversora and Eton Park Capital Management. Both sued, claiming billions in losses.
A judgment Argentina called existential
In September 2023, U.S. District Judge Loretta Preska found Argentina liable. She awarded Petersen $14.39 billion and Eton Park $1.71 billion, including $8.43 billion in damages and $7.67 billion in interest at an 8% rate.
The total judgment represented roughly 45% of Argentina’s 2024 national budget. Government officials warned that paying it could devastate the economy, which has long struggled with debt and runaway inflation. By the time the appeal reached oral arguments last October, interest had pushed the figure to $18 billion.
Argentina had also been fighting a separate June 2025 order requiring it to hand over its YPF shares to partially satisfy the debt. Because Friday’s ruling voided the judgment, the appeals court threw out that order too.
Milei celebrates, calls it ‘historic’
President Milei wasted no time reacting. In a post on X, he called the decision “the best possible” outcome.
“WE WON THE YPF LAWSUIT,” he wrote. “It’s historic, unthinkable, the greatest legal achievement in national history.”
Robert Giuffra, a lawyer representing Argentina, said the ruling “entirely vindicates Argentina’s position that the district court misapplied governing Argentine law.” He also took aim at the litigation’s financial backers, saying they had tried to “turn the U.S. courts into a casino.”
Meanwhile, Argentine economist Roberto Geretto praised the decision for its broader implications. Beyond saving the government billions, he said, it “clears up doubts about the control of YPF.”
Burford Capital takes a steep hit
The ruling dealt a severe blow to Burford Capital, the UK-based litigation finance firm that funded the case. Burford stood to collect a large share of any payout. Instead, its stock plunged 47% on the day, closing at $4.14 — down $3.69.
In a statement, CEO Christopher Bogart called the decision “obviously very disappointing.” Still, the company signaled the fight isn’t over. Burford said it expects the plaintiffs to appeal, potentially all the way to the U.S. Supreme Court. Arbitration under investment treaties remains another option.
On the financial side, Burford warned of a non-cash writedown in its first-quarter results. A material writedown, the company added, could limit its ability to issue new debt and pursue future investments.
What the appeals court actually decided
Writing for the majority, Circuit Judge Denny Chin concluded that YPF’s bylaws did not require Argentina to make a tender offer to shareholders like Petersen and Eton Park. On top of that, he found that Argentine expropriation law blocked third-party lawsuits and was likely designed to “mitigate the fallout” from claims like these.
Notably, the court did not rule on two other key questions in the case. First, whether the plaintiffs had standing to sue in the U.S. given that the underlying events took place in Argentina. Second, whether foreign relations concerns should have shielded Argentina from liability in an American courtroom.
Circuit Judge Jose Cabranes dissented. While he praised the majority’s legal reasoning, he argued the court owed “special consideration and respect” to Judge Preska’s findings. She had spent a decade closely evaluating the case, and Cabranes felt that deserved more weight.
