By Jonathan Stempel
NEW YORK, March 27 (Reuters) - A divided U.S. appeals court on Friday struck down a $16.1 billion judgment against Argentina for seizing control of state-owned oil company YPF in 2012, a victory for Argentine President Javier Milei as he tries to stabilize the country's long-strained economy.
In a 2-1 vote the 2nd U.S. Circuit Court of Appeals in Manhattan said the plaintiffs' breach of contract damages claims were not recognizable under Argentina's civil codes and public law, justifying
a reversal.
Argentina had been seeking to overturn the $16.1 billion award in September 2023 by a lower court judge to former YPF shareholders Petersen Energia Inversora and Eton Park Capital Management for alleged losses tied to YPF's nationalization.
The country had also been appealing a June 2025 order that it turn over the YPF shares to partially satisfy the judgment. Because the judgment was voided, the 2nd Circuit vacated the turnover order.
Burford Capital, a UK-based company that funds the litigation, would have collected much of the $16.1 billion judgment had it been upheld. The award had grown to $18 billion with interest when the appeal was argued last October, a lawyer for Argentina said.
Shares of Burford fell 47% in U.S. trading following the decision. The company did not immediately respond to a request for comment.
Milei welcomed the decision. "WE WON IN THE YPF LAWSUIT...!!!" he posted on X.
The appeal concerned Argentina's decision to expropriate 51% of YPF's shares from Spain's Repsol for $5 billion without making a tender offer to Petersen and Eton Park, YPF's second- and third-largest investors.
YPF had been private since 1993. Cristina Fernandez de Kirchner, Argentina's president in 2012, said at the time that YPF should be re-nationalized because it failed to produce enough oil and natural gas to satisfy local demand.
ARGENTINA SAID A BIG AWARD COULD CRIPPLE ECONOMY
In September 2023, U.S. District Judge Loretta Preska in Manhattan found that Argentina breached its obligations to Petersen and Eton Park, and ordered that it pay them $14.39 billion and $1.71 billion, respectively.
Those sums included $8.43 billion of damages, plus $7.67 billion of prejudgment interest at an 8% rate.
Argentina has maintained that a big award could cripple its economy, which has long struggled with debt and high inflation.
The $16.1 billion payout represented 45% of Argentina's total budget in 2024, the country has said.
During oral arguments on October 29, the three-judge appeals court panel had questioned why the case was in the United States, given that the underlying activity occurred in Argentina and involved alleged violations of Argentine law.
A lawyer for Petersen and Eton Park defended pursuing the case in the United States, saying Argentina's economic struggles and "penchant for nationalism" meant investors might be treated less fairly by that country's courts.
(Reporting by Jonathan Stempel in New York; Editing by Rod Nickel and Matthew Lewis)
