On September 8, 2023, a Manhattan federal judge ruled unfavorable for Argentina, leading to a significant legal victory for the nation. This decision reversed a previous order that obligated Argentina to pay substantial compensations to companies claiming damages from the nationalization of YPF. President Javier Milei hailed this ruling as historic, emphasizing it as one of the greatest legal achievements in Argentina’s history.
Details of the Court Ruling
Judge Loretta Preska’s ruling had initially condemned Argentina to pay damages that, with interest, could have escalated to approximately $18 billion. The compensation was tied to the 2012 expropriation of a 51% stake in YPF, previously partially owned by Spanish company Repsol.
Historical Context of YPF Nationalization
The nationalization effort followed concerns that YPF was not adequately supplying sufficient oil and gas to meet local demand. This move led to legal battles with minority shareholders like Petersen Energía and Eton Park Capital, who owned 25.4% of YPF. In 2015, these shareholders filed a lawsuit after Argentina allegedly failed to make a public tender offer as required by law.
Legal and Financial Implications
- Burford Capital financed the minority shareholders’ claims, investing $16.6 million in legal costs.
- The firm stood to gain 38% of any awarded compensation based on the court’s decision.
- If the ruling had remained, it could have severely impacted Argentina’s foreign reserves, which are around $43.5 billion.
In June 2025, Preska had ordered Argentina to transfer its 51% stake in YPF to fulfill part of the compensation. Following an appeal, a higher court determined that the shares should not be transferred, providing further relief to Argentina.
Political Reactions
President Milei was vocal about his approval of the recent verdict, criticizing opposition figures, particularly Axel Kicillof, who played a role in the nationalization during the previous administration. Milei called Kicillof “incompetent” for his actions during the second government of former president Cristina Kirchner.
This latest ruling marks a significant turning point for Argentina, potentially saving the nation over $16.1 billion and aiding its ongoing economic recovery efforts.
