Landmark Court Ruling Overturns $16.1 Billion Judgment Against Argentina

A U.S. appeals court overturned a $16.1 billion judgment against Argentina, marking a significant victory for President Javier Milei. The decision reversed a previous ruling accusing Argentina of breaching contract laws in expropriating YPF shares. The case highlights complex legal interpretations and potential economic impacts for Argentina.

In a significant legal victory for Argentina, a U.S. appeals court on Friday nullified a $16.1 billion judgment previously levied against the country for the expropriation of YPF shares in 2012. The ruling represents a cornerstone achievement for Argentine President Javier Milei, who is striving to stabilize the nation's troubled economy.

The 2nd U.S. Circuit Court of Appeals in Manhattan, through a 2-1 vote, concluded that the breach of contract claims brought by former YPF shareholders, Petersen Energia Inversora and Eton Park Capital Management, were invalid under Argentine law. This overturning comes as a relief to Argentina, given the judgment represented a significant portion of its national budget for 2024.

The court's decision also poses a setback for Burford Capital, a UK-based litigation finance company that backed the lawsuit. Despite the setback, Burford indicated plans to appeal the decision and explore other legal avenues, including arbitration, to recover the investment loss.

(With inputs from agencies.)