Argentina achieved a victory considered historic in the United States courts in a billion-dollar dispute linked to the nationalization of the oil company YPF. The 2nd Circuit Court of Appeals in New York overturned a $16.1 billion judgment against the country, imposed in 2023 by a federal judge in Manhattan.
By two votes to one, the judges understood that the accusations of breach of contract made by former shareholders Petersen Energia Inversora and Eton Park Capital Management are not sustainable in light of Argentine legislation, which served as the basis for the case.
The process dealt with the nationalization of YPF in 2012, during Cristina Kirchner’s government. At the time, Argentina expropriated 51% of the company’s shares that were in the hands of Spanish Repsol, paying US$5 billion, but without making a public offer to the other large shareholders, such as Petersen and Eton Park.
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The overturned sentence now ordered the payment of US$14.39 billion to Petersen and US$1.71 billion to Eton Park, totaling US$8.43 billion in damages and US$7.67 billion in interest, at a rate of 8% per year.
In reversing the conviction, the appeals court also invalidated a previous order that ordered the delivery of YPF shares as a way of guaranteeing part of the payment.
In the winning vote, judge Denny Chin stated that YPF’s statute did not oblige the Argentine State to make an offer to the other shareholders under the conditions under which the expropriation of Repsol’s stake occurred.
He also highlighted that the Argentine law on expropriations prevents third parties from trying to seek compensation of this type from the outside, and assessed that the process, in practice, sought to extract payment for taking Repsol’s actions, interfering in the country’s sovereign decision.
In Buenos Aires, President Javier Milei celebrated the result on social media, calling the decision “the best possible” and stating: “WE WON THE YPF CAUSE. It is historic, unthinkable, the greatest legal success in national history.”
Local economists assess that the relief is relevant not only for its fiscal impact — by removing a billion-dollar payment — but also for reducing doubts about the control of YPF, considered a key part of the energy strategy and the attempt to reorganize the country’s economy, marked by high inflation, chronic debt and successive crises of confidence.
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