MercoPress. South Atlantic News Agency

Judge Preska insists Argentina must pay for YPF expropriation

Argentina has until Thursday to appeal Monday's ruling

Judge Loretta Preska of the Southern District of New York Monday upheld her 2023 ruling against Argentina, rejecting the Libertarian Government's request to suspend the transfer of 51% of YPF shares to vulture funds Burford Capital and Eton Park Capital Management. This decision mandates the handover of shares valued at US$16.1 billion and is believed to represent a significant blow to the South American country, potentially leading to the loss of control over its national oil company.

The magistrate denied Argentina's plea to halt the transfer, citing that the country “took full advantage of the extra time” and “made no effort to meet the conditions imposed” since the trial began in 2012.

The US$16.1 billion payment, including interest, is due to Burford, Eton Park, and Bainbridge funds. Burford had acquired the litigation rights in the bankruptcy of Petersen companies in Spain.

Argentina's government argued the 2012 expropriation of YPF was an act of national sovereignty for public interest, a claim not accepted by the court.

Buenos Aires now has three days to appeal to avoid a contempt of court order. The Court of Appeals is expected to set a hearing date soon after the appointment of its three judges.

Should Argentina fail to comply by the July 17 deadline, it could face a contempt order. While unlikely to result in arrests, this could lead to the seizure of Argentine assets abroad (property, bank accounts, commercial assets), damage to international credibility, and a weaker negotiating position in future financial matters.

Although YPF itself is not directly liable, the transfer of state shares will significantly impact the company's stability, investment projects (especially in Vaca Muerta), and access to financing, raising concerns about national sovereignty over a strategic resource, it was explained.

The US Government of President Donald Trump has reportedly expressed disagreement with Preska's decision, highlighting the complexity and unprecedented nature of this large-scale dispute.

This ruling further complicates President Javier Milei's administration, which is already facing economic challenges and political setbacks. The Argentine Treasury Attorney's Office said it was working on all possible scenarios.

Burford and Eton Park sued the Argentine government for the expropriation of YPF in 2012 and won Preska's ruling in 2023, which imposed the payment of compensation of 16.1 billion plus interest. The Bainbridge fund was also included as a beneficiary, which would receive shares in the company as part of the payment of the debt in default since 2001.