NEW YORK: A US appeals court has temporarily halted an order requiring Argentina to surrender its 51% stake in YPF to satisfy a $16.1 billion judgment. The 2nd US Circuit Court of Appeals in Manhattan paused the June 30 turnover ruling while Argentina contests the decision.
The stay offers relief to President Javier Milei’s government, which warned of economic instability if forced to relinquish control of YPF. Argentina is separately appealing the $16.1 billion award granted to Petersen Energia Inversora and Eton Park Capital Management in 2023.
Burford Capital, the litigation funder backing the investors, stands to receive a portion of any damages recovered. Legal representatives for Petersen and Eton Park did not immediately comment on the ruling.
The court’s order did not explain its reasoning but is expected to remain in effect for several months. Argentina’s next legal submission regarding YPF is due by September 25.
The conflict traces back to Argentina’s 2012 seizure of YPF from Spain’s Repsol without offering minority shareholders a tender. Argentina claimed the shares were protected under the Foreign Sovereign Immunities Act.
The US government supported Argentina, urging a cautious resolution to avoid straining diplomatic ties. Investors argued Argentina’s prolonged evasion and a commercial activity exception justified the turnover.
Judge Loretta Preska ruled in June that Argentina’s control of YPF triggered the exception, dismissing claims that local laws could block the transfer. A government spokesperson welcomed the stay, expressing confidence the damages award would also be overturned. – Reuters
