Argentina wins reprieve in US court fight over YPF shares

An appeals court ruled that Argentina doesn’t need to turn over its controlling stake in YPF SA to holders of a US$16-billion judgment while the nation tries to overturn a US judge’s order requiring it to do so.

The New York-based appeals court in a brief ruling on Friday granted Argentina’s request to put US District Judge Loretta Preska’s June 30 order on hold during the appeals process, which is likely to take months. The decision by the Second US Circuit Court of Appeals relieves some of the pressure on President Javier Milei’s government as the nation moves toward October legislative elections.

In June, Preska ordered Argentina to surrender its 51-percent stake in YPF to partially compensate YPF shareholders after the country nationalised the energy company in 2012. Preska ruled in 2023 that the shareholders, led by the litigation funding firm Burford Capital, are owed payments for their shares, plus interest.

“The Republic welcomes the Court of Appeals’ decision,” a spokesperson said in a statement Friday. The nation is confident the court will throw out Preska’s order and the underlying US$16-billion judgment, which is also being appealed, according to the spokesperson.

A spokesperson for Burford declined to comment on the ruling. 

The US government had urged Preska not to force Argentina to forfeit the shares before the appeal is decided. The appeals court also ruled Friday that the US may file arguments in support of Argentina’s appeal.

The case is Petersen Energia Inversora v. Argentine Republic, 25-1687, Second US Circuit Court of Appeals (Manhattan).