Brazil & Southern Cone - May 2026

President Javier Milei enjoyed another major breakthrough when a US appeals court backed Argentina in a long-standing legal dispute surrounding minority shareholder claims related to the nationalisation of oil company YPF in 2012. The ruling saves the Argentine government more than US$16bn in punitive damages and paves the way for its return to international capital markets. 

The New York federal appeals court in late March this year overturned a previous lower court ruling from 2023 that had obliged Argentina to pay former minority shareholders affected by YPF’s 2012 nationalisation, Petersen Energía Inversora and investment firm Eton Park Capital Management.

The two companies, backed by UK-based litigation finance provider Burford Capital, had argued that their right to equal treatment, enshrined in YPF statutes, had been denied when the government of former president Cristina Fernández (2007-2015) paid only Spain’s Repsol US$5bn for its 51% stake in YPF. But the appeals court has now taken the contrary view that Argentine law overrides YPF statutes.

Lawyers for the minority investors said in April they will pursue international treaty arbitration, as well as further appeals in the US court system. But any further development in the case could take years. Meanwhile, the Milei administration celebrated the appeals court decision in March as a major breakthrough.

“It’s historic, unthinkable, the greatest judicial victory in national history,” Milei posted on X. The Argentine government has argued that having to pay the former YPF shareholders would have been economically ruinous. Because it lacked the funds, a defeat in court could have forced Argentina to turn over its 51% stake in YPF as a payment to minority shareholders, as the lower court judge had ordered in 2023.

Milei had refused to negotiate with the plaintiffs, creating a standoff that overshadowed any future bond sale of YPF and the Argentine government. Obtaining legal clarity from the court helps pave the way for Argentina’s return to international capital markets, a major objective of the Milei administration.

Also weighing in on the case was Milei’s ally, US President Donald Trump. His administration had opposed allowing Burford to seize YPF shares, warning that US overseas assets could be vulnerable to similar orders by foreign courts.

The ruling also marks a significant political victory for Milei, who has been on a roll in recent months with a series of legislative wins, including an historic labour reform and an overhaul to a glacial protection law that is expected to boost the mining sector. 

The episode also has political overtones, playing into his narrative that the impulsive interventionism of previous left-leaning governments had put Argentina financially at risk and that only his own administration has acted responsibly. This is particularly relevant since Axel Kicillof, who is the current governor of Buenos Aires province but previously served in the Fernández administration and played a key role in the 2012 YPF nationalisation, is considered a potential rival to Milei who could run as main opposition candidate in the 2027 presidential election.

Trading barbs

Following the appeals court decision, President Milei sought to blame all these years of litigation on the irresponsibility of Kicillof, who was instrumental in overseeing the YPF nationalisation. However, Kicillof responded by celebrating the ruling as an end to the lies of the so-called “vultures”, referring to hedge funds and financial firms such as Burford seeking to profit through the lawsuit. Kicillof also suggested that the Argentine right would never have agreed to nationalise YPF and had always worked for the “vultures”, adding that Milei never defended YPF, rather he served foreign interests.