US appeals court overturns judgment against Argentina’s YPF as President Milei celebrates

A New York appeals court has overturned a $16.1 billion judgment against Argentina, reversing a lower court’s order to compensate former shareholders of the nationalized energy giant YPF. The decision, reviewed by The Associated Press, represents a significant legal victory for the South American nation.

The U.S. Court of Appeals for the Second Circuit struck down the 2023 judgment issued by U.S. District Judge Loretta Preska, who had originally ordered Argentina to compensate investors Petersen Energía and Petersen Energía Inversora for the 2012 seizure of a majority share in YPF Energy.

Argentine President Javier Milei celebrated the ruling during a national broadcast on Friday. “Today is a day of celebration for the good Argentines,” Milei declared. “What seemed impossible, we made possible.” The libertarian president also announced that his government has submitted a bill to Congress aimed at limiting future expropriations and increasing compensation for affected parties.

The case stems from the controversial 2012 nationalization of YPF, Argentina’s largest energy company, when the government under then-President Cristina Fernández de Kirchner seized a 51% controlling stake. The action prompted international investors to seek compensation through U.S. courts, as YPF is listed on the New York Stock Exchange.

Milei, who took office in December 2023 with promises to revitalize Argentina’s struggling economy, used the occasion to criticize his political opponents. “Because I’m Milei, I’ll say it the Milei way,” he wrote on social media, claiming his administration had “cleaned up the mess” left by former leader Kirchner. His comments reflect the deep political divisions that continue to shape Argentine politics.

Kirchner, who served as president from 2007 to 2015, is currently under house arrest following a six-year prison sentence for corruption, further complicating the political landscape in Argentina.

Last year’s lower court ruling had potentially severe implications for Argentina’s economy. In June 2023, Judge Preska ordered Argentina to transfer its 51% controlling stake in YPF as partial compensation to the plaintiffs. Two months later, however, the appeals court placed that order on hold pending review, culminating in Friday’s decision to overturn the judgment entirely.

The legal battle over YPF has been closely watched by international investors and energy markets. The 2012 nationalization reinforced concerns about Argentina’s commitment to honoring international obligations, further damaging the country’s standing in global financial markets. Argentina has a complex history of debt defaults and economic crises that has made foreign investors wary.

Despite these challenges, YPF has played a crucial role in developing Argentina’s vast energy resources. Since its nationalization, the company has accelerated the exploitation of Argentina’s substantial shale gas reserves in the Vaca Muerta field in Patagonia. Crude production at Vaca Muerta has steadily increased, reaching nearly 600,000 barrels per day in January, accounting for approximately 68% of national output.

The company’s financial performance has also improved significantly in recent years. In 2025, YPF reported a profit of $5 billion, its highest level in a decade, suggesting that the nationalized company has found some stability despite the ongoing legal challenges.

President Milei, who has pledged to privatize state-owned companies and rebuild depleted foreign reserves, has frequently pointed to the YPF legal case as evidence of the economic damage caused by his predecessors’ policies. His administration faces the daunting task of stabilizing Argentina’s economy while navigating complex international legal disputes and domestic political tensions.

The court’s decision represents a significant reprieve for Argentina’s finances at a time when the country is struggling with high inflation, currency devaluation, and limited access to international credit markets.