Argentina ordered to surrender its 51% stake in YPF

ARGENTINA - In Brief 01 Jul 2025 by Joaquin Cottani

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Yesterday, Judge Loretta Preska from the Southern District Court of NY ordered the Government of Argentina to surrender the 51% stake it has in YPF, the national oil company, to partially satisfy a $16.1 billion court judgement issued in 2023 and whose main beneficiary is Burford Capital. The government was given 14 working days to transfer the shares to a BNY Mellon custody account owned by the plaintiffs. President Milei has vowed to appeal this order.  The original court judgement stems from Argentina's 2012 nationalization of YPF, which violated the company's bylaws by not making a tender offer to all shareholders. Although the judgement is currently under appeal, ordering its partial execution, which is what Judge Preska did yesterday, is permitted under US law while Argentina's claim that the YPF shares are protected under the Foreign Sovereign Immunities Act was rejected by the judge citing a commercial activity exception.  Even if President Milei wanted to comply with the order—which he obviously doesn't because it would be tantamount to committing political suicide four months before a crucial midterm election—his government could not transfer the shares because the 2012 YPF nationalization law, which led to the plaintiffs' demand, forbids it and changing the law requires a two-thirds majority approval by Congress, which is obviously impossible.  Argentina will likely argue that asking its government to change a national law violates the so-called "international comity" principle of no intervention in another country's political affairs, but Judge Preska also dismissed this argument saying that if Argentina's government cannot change the law, it must sit with ...