U.S. court overturns $16 billion judgment against Argentina in YPF case
(Bloomberg) - Argentina secured a major legal victory after a U.S. appeals court overturned a $16.1 billion judgment tied to the 2012 nationalization of state oil company YPF.
The ruling reverses a prior decision by a Manhattan federal judge, who had sided with former shareholders claiming they were harmed when Argentina seized control of YPF from Spain’s Repsol without extending a required tender offer to minority investors. The case had been backed by litigation funder Burford Capital, which stood to receive a significant portion of any damages awarded.
In its decision, the appeals court found that the lower court had erred in its interpretation of the claims, effectively nullifying one of the largest financial judgments ever faced by a sovereign state in an energy-related dispute.
The outcome removes a substantial financial overhang for Argentina at a time when the country is seeking to attract investment into its oil and gas sector, particularly in the Vaca Muerta shale play, one of the world’s largest unconventional resource basins.
Earlier: Argentina must give up 51% controlling stake in YPF, judge rules
Shares of Burford Capital fell sharply following the ruling.
While the decision marks a significant win for Argentina, the long-running dispute underscores the legal and political risks that can accompany upstream investment in resource-rich markets.
