U.S. Appeals Court Considers Overturning $16.1 Billion Judgment Against Argentina

A U.S. appeals court on Wednesday mulled overturning a hefty $16.1 billion judgment against Argentina, linked to the expropriation of the oil company YPF in 2012. Judges from the 2nd U.S. Circuit Court of Appeals entertained the idea that local Argentine courts might be better suited to adjudicate the case, thus possibly sparing Argentina from an economically burdensome ruling.

The judgment, issued by U.S. District Judge Loretta Preska in September 2023, awarded compensation to former YPF shareholders for alleged losses following its nationalization. The plaintiffs, Petersen Energia Inversora and Eton Park Capital Management, argue Argentina failed in its obligations, cheered by lawyers who see U.S. courts as more impartial than their Argentine counterparts.

A reversal would impact Burford Capital, which finances the litigation. Moreover, Argentine President Javier Milei, who has been slashing public spending to stabilize the economy, fears the substantial financial hit could destabilize the country's precarious economic situation. The court did not indicate when it might issue a ruling, leaving Argentina's legal and economic prospects uncertain.