U.S. Court of Appeals Grants Argentina Stay in $16.1 Billion YPF Case
New York, NY – August 18, 2025 – The U.S. Court of Appeals for the Second Circuit in Manhattan granted Argentina a temporary stay on August 15, 2025, halting a lower court’s order to transfer its 51% stake in state-owned energy company YPF SA to satisfy a $16.1 billion judgment. The ruling, issued without detailed reasoning, provides a reprieve for President Javier Milei’s government, which warned that losing control of YPF, Argentina’s largest energy firm, could destabilize the nation’s economy. The stay, effective pending Argentina’s appeal of the judgment, marks a significant development in a long-running legal battle stemming from the 2012 nationalization of YPF.
Background of the Case
The dispute originates from Argentina’s 2012 expropriation of a 51% stake in YPF from Spanish oil company Repsol SA, without a tender offer to minority shareholders, including Petersen Energia Inversora and Eton Park Capital Management. These investors, backed by litigation funder Burford Capital, sued Argentina, alleging breach of YPF’s bylaws requiring a tender offer. In September 2023, U.S. District Judge Loretta Preska awarded the plaintiffs $16.1 billion ($14.39 billion to Petersen, $1.71 billion to Eton Park), one of the largest judgments against a sovereign nation.
On June 30, 2025, Preska ordered Argentina to transfer its 51% YPF stake to a global custody account at the Bank of New York Mellon to partially satisfy the debt, rejecting Argentina’s claim that the shares were protected under the Foreign Sovereign Immunities Act (FSIA). Argentina appealed, arguing that the turnover would cause irreparable economic harm and violate its sovereignty. The U.S. government supported Argentina’s position, cautioning that rushed enforcement could strain bilateral relations.
The Stay and Its Implications
The Second Circuit’s decision to stay Preska’s order, detailed in a brief ruling by Clerk Catherine O’Hagan Wolfe, suspends the share transfer while Argentina’s appeal of both the turnover order and the underlying $16.1 billion judgment proceeds. Argentina’s next legal filing is due by September 25, 2025, with the stay expected to last at least several months. The Argentine government welcomed the ruling, stating it “guarantees that the Republic retains the National State’s majority stake in the company while the appeal proceeds” and expressing confidence that the $16.1 billion judgment will be overturned.
The stay prevents immediate economic fallout for Argentina, which faces soaring inflation, a heavy debt burden, and dwindling foreign currency reserves. YPF, valued at $10.4 billion based on recent market data, is a critical asset, and its loss could disrupt energy production and economic stability. However, the plaintiffs, represented by Burford Capital, remain determined, with potential to receive 35% to 73% of the damages. Their lawyers did not immediately comment on the stay.
Broader Context and Reactions
The case has drawn significant attention due to its financial and geopolitical implications. Argentina previously settled with Repsol for $5 billion in 2014, but minority shareholders like Petersen and Eton Park were excluded, prompting the 2015 lawsuit. President Milei, who has pledged to privatize YPF but faces legal barriers requiring a two-thirds congressional majority, welcomed the stay as a “positive step.” Posts on X reflected mixed sentiment: @Reuters noted the temporary relief for Argentina, while @batimes highlighted the ongoing fight against the “US$16.1-billion ruling in nationalisation case.”
Critics of the judgment, including Argentina’s legal team, argue that the FSIA should shield state assets and that Preska’s commercial activity exception ruling oversteps U.S. jurisdiction. Conversely, Burford Capital contends that Argentina’s years of “evasion” justify the turnover, emphasizing the precedent set by Preska’s June 2025 order.
Critical Perspective
The Second Circuit’s stay is a tactical victory for Argentina but delays rather than resolves the underlying dispute. The $16.1 billion judgment, if upheld, could cripple Argentina’s economy, already strained by a history of defaults and IMF debts. The U.S. government’s support for Argentina suggests diplomatic considerations may influence the case, potentially at the expense of the plaintiffs’ claims. However, the lack of transparency in the appeals court’s reasoning raises questions about the criteria for the stay, and the plaintiffs’ backing by Burford Capital—a major litigation funder—ensures continued pressure. The case could escalate to the U.S. Supreme Court, prolonging uncertainty for all parties.
What’s Next?
Argentina’s appeal of the $16.1 billion judgment and the turnover order will proceed in the Second Circuit, with arguments likely focusing on FSIA protections and the economic impact of enforcement. The plaintiffs may push for expedited review, though the stay provides Argentina breathing room. Regulatory and congressional hurdles to transferring YPF shares, as outlined in Argentina’s 2012 expropriation law, add complexity, potentially requiring Milei to navigate domestic political challenges alongside international litigation.
For now, the stay preserves Argentina’s control over YPF, but the outcome of the appeal will determine whether this is a temporary reprieve or a step toward overturning the massive judgment. Investors and policymakers should monitor developments closely, as the case could reshape Argentina’s economic trajectory and set precedents for sovereign asset disputes globally.
Sources: Information drawn from Reuters, Buenos Aires Times, Yahoo Finance, Bloomberg Law, U.S. News, and posts on X (references,,,,,,,,,,,). Always verify with trusted sources, as X posts may contain unverified claims.