A New York appeals court has overturned a monumental $16.1 billion judgment against Argentina, reversing a lower court order that mandated compensation for former shareholders of the nationalised energy company YPF. This decision marks a significant victory for Argentine President Javier Milei, who hailed it as historic and celebrated the outcome on social media.
Legal Reversal in Long-Running Dispute
The U.S. Court of Appeals for the Second Circuit struck down the 2023 ruling by U.S. District Judge Loretta Preska, which had ordered Argentina to pay Petersen Energía and Petersen Energía Inversora for the 2012 seizure of a majority stake in YPF Energy. The case, reviewed by The Associated Press, has been a protracted legal battle, with the appeals court placing the compensation order on hold last year.
Political Reactions and Historical Context
President Milei expressed jubilation over the ruling, posting on X that it was "the greatest judicial victory in national history." He also criticised former left-wing leader Cristina Fernández de Kirchner, whose administration oversaw the nationalisation, claiming his government has "cleaned up the mess" left by her tenure. Kirchner is currently under house arrest following a corruption conviction.
The 2012 nationalisation of YPF, Argentina's largest energy company, further tarnished the country's international reputation by highlighting its history of financial defaults. Plaintiffs pursued the lawsuit in the U.S. due to YPF's listing on the New York Stock Exchange, leveraging American jurisdiction.
Economic Implications and YPF's Performance
Milei, who has faced challenges in rebuilding foreign reserves and has advocated for privatising state-owned enterprises, frequently attributes the legal fallout from the YPF seizure to political opponents. Despite the controversy, YPF has thrived since nationalisation, accelerating development of the vast Vaca Muerta shale gas reserves in Patagonia.
Crude production at Vaca Muerta has surged, reaching nearly 600,000 barrels per day in January, accounting for about 68% of national output. In 2025, YPF reported a profit of $5 billion, its highest in a decade, underscoring the company's robust performance amid ongoing legal and political scrutiny.
