Argentina Appeals U.S. Court Order to Hand Over YPF Stake Amid $16.1B Judgment

Argentina has filed an emergency appeal with the 2nd U.S. Circuit Court of Appeals in Manhattan, seeking to block a U.S. judge’s order to transfer its 51% stake in state oil firm YPF. The turnover is intended to partially satisfy a $16.1 billion court judgment related to Argentina’s 2012 nationalization of YPF without compensating minority stakeholders.

Calling the ruling a threat to national sovereignty and economic stability, Argentina warned that enforcing the order by Monday would cause “irreparable harm” and result in the permanent loss of control over its largest energy company. President Javier Milei’s administration is already facing significant economic challenges, including soaring inflation and depleted foreign currency reserves.

The legal dispute stems from Argentina’s seizure of a majority YPF stake from Spain’s Repsol without extending a mandatory tender offer to minority shareholders, Petersen Energia Inversora and Eton Park Capital Management. In 2023, U.S. District Judge Loretta Preska ordered Argentina to pay $14.39 billion to Petersen and $1.71 billion to Eton Park. Litigation finance firm Burford Capital, which funded the lawsuit, expects to receive 35% and 73% of the respective damages.

Argentina argues that turning over YPF shares would violate international law and diplomatic norms, equating the ruling to a foreign court ordering the U.S. to ship gold from Fort Knox. The country requested the appeals court rule on its stay motion by Monday morning, allowing time to escalate the matter to the U.S. Supreme Court if necessary.

Preska is expected to decide by Monday whether to pause the turnover. Both parties would then have three additional days to appeal. Argentina has not commented publicly on the ongoing legal battle.