Argentina wins reprieve in $16bn YPF case but legal battle set to run until 2027

A US appeals court has overturned a $16.1bn judgment against Argentina over the 2012 nationalisation of energy firm YPF, offering a significant legal respite for the South American country and prompting a strong political response from President Javier Milei.

The US Court of Appeals for the Second Circuit on March 27 struck down a 2023 ruling by a New York judge that had ordered Argentina to compensate former shareholders Petersen Energía and Petersen Energía Inversora. The original decision stemmed from claims that the government failed to launch a required tender offer when it seized a 51% controlling stake in YPF.

Milei celebrated the ruling in a televised national address, describing it as a turning point for the country. “Today is a day of celebration for the good Argentines,” he said. “What seemed impossible, we made possible.”

He also framed the outcome as relief from a potentially larger financial burden, saying Argentina had avoided a payout he estimated at around $18bn.

The president used the broadcast to criticise the controversial expropriation carried out under former president Cristina Fernández de Kirchner, calling it a “suicidal adventure” and arguing that it triggered one of the most costly legal disputes in the country’s history. “Expropriation is wrong because stealing is wrong,” Milei said.

The case, however, remains unresolved despite the appellate ruling. Legal experts note that the decision does not close the dispute but instead opens a new phase of litigation. According to specialist Sebastián Maril, the plaintiffs may seek a rehearing before the full appeals court, a procedure known as an en banc review, although such requests are rarely granted, Ámbito reported.

If that effort fails, the next step could be an appeal to the US Supreme Court. While acceptance rates for such cases are historically low, timing could influence the process, with potential decisions extending into late 2026 or beyond. A final resolution could be delayed until mid-2027 if the court agrees to hear the case.

In parallel, creditors may pursue arbitration through the International Centre for Settlement of Investment Disputes (ICSID), a World Bank tribunal, creating an additional legal track outside the US judicial system.

The dispute originated from Argentina’s nationalisation of YPF in 2012, then controlled by Spain’s Repsol. Minority shareholders later filed lawsuits in the United States, citing breaches of corporate statutes. In 2023, a lower court awarded damages of more than $16bn, one of the largest rulings ever issued against Argentina.

Despite the legal uncertainty, YPF has expanded production since the nationalisation, particularly in the Vaca Muerta shale formation, where output reached nearly 600,000 barrels per day in January, accounting for about 68% of national production. The company reported profits of $5bn in 2025, its highest in a decade.

Economy Minister Luis Caputo weighed in, slamming Peronist leader Axel Kicillof for defending YPF's nationalisation. “ All the oil companies are now investing billions of dollars, and they are all private companies. In fact, most of our country's oil exports today come from these private companies,” he stated on social media.

The economy chief added that "the energy surplus has nothing to do with the expropriation of YPF, but rather with the change in economic and energy policy."

Milei, who has pledged to privatise state-owned firms and rebuild foreign reserves, said the ruling reflected the “legal, political and diplomatic expertise” of his administration, while reiterating that past policies had damaged Argentina’s economic standing and deterred investment.