MercoPress. South Atlantic News Agency

YPF case: NY Court of Appeals rules in favor of Argentina

The stay is limited solely to the June 30 surrender order from Judge Loretta Preska

The Second Circuit Court of Appeals in New York has suspended a lower court's order that required Argentina to transfer 51% of its shares of the state oil company YPF to a New York bank. This overruling of Judge Loretta Preska's Sept. 2023 order is a significant win for Buenos Aires, as it allows the South American country to appeal the $16 billion judgment without having to surrender a key state asset

The Argentine government, led by President Javier Milei, praised the decision, calling it a “decisive step to protect a strategic asset.” The court also allowed the US Department of Justice to participate in the case, which supported Argentina's stance.

The case stems from Argentina's 2012 expropriation of 51% of YPF from the Spanish company Repsol. The lawsuit, brought by litigation fund Burford Capital, argues that Argentina failed to make a required public takeover bid, violating the company's bylaws.

Friday's ruling, signed by Judges Myrna Pérez, Sarah Merriam, and María Araújo Kahn, establishes that the stay is limited solely to the June 30 surrender order and does not affect the course of the substantive appeal against the 2023 ruling. It also orders Argentina to file calendar notices pursuant to local rules of the Second Circuit.

While the appeal process continues, the case has entered the discovery phase, during which the parties exchange documents and information. The plaintiffs are requesting details related to assets, financial operations, and properties that could be used to enforce the judgment. These inquiries specifically target Argentine holdings and data concerning government officials.

In response, Argentina submitted a motion to Judge Preska seeking to suspend the discovery order and temporarily block the release of sensitive information until the appeal is resolved. The aim is to prevent the plaintiffs from gaining access to data that, in the event of a final loss, could serve as a roadmap for seizing state assets. The lower court has yet to rule on this request.

“For more than ten years, different administrations have missed the opportunity to resolve this litigation. Today, we are fully exercising our right to defense, using all available legal tools to protect national interests,” Casa Rosada sources quoted by Buenos Aires outlets mentioned.