Argentina wins discovery stay in US$16-billion YPF US court case

Argentina won an order blocking holders of a US$16.1-billion US judgment against it from seeking information on seizable assets until a federal appeals court in New York rules on the nation’s challenge to the award.

The US Second Circuit Court of Appeals on Wednesday paused efforts by former YPF SA shareholders backed by litigation funder Burford Capital to obtain the communications of current and former Argentine officials or pursue evidence related to the location of gold bars the country’s central bank moved overseas. 

US District Judge Loretta Preska awarded the judgment, which has since swelled to more than US$18 billion with interest, to former YPF shareholders in 2023. She found their rights were violated in the Argentine government’s 2012 nationalisation of the oil company. 

Argentina has argued that Preska should not have decided the case because it was governed by Argentine law. The plaintiffs claim investors would not have bought shares in YPF if they thought their only recourse would be in an Argentine court. 

During oral arguments in the appeal last October, two members of a three-judge circuit court panel expressed scepticism about the case being decided by a US court. A ruling by the Second Circuit on Argentina’s appeal could now come at any time.

In the meantime, plaintiffs have struggled to collect the judgment. They have tried to seize the Argentine government’s 51 percent stake in YPF. Preska ordered Argentina to hand over the shares, but her ruling was put on hold by the Second Circuit and is the subject of a separate appeal. 

In a Wednesday statement, President Javier Milei hailed the discovery stay as “a historic achievement in the Argentine Republic’s defence in litigation that, during more than 12 years, has meant an enormous economic, judicial and reputational cost for the country.”

Burford and the plaintiffs had no immediate comment.

The judgment represents a huge amount for a country that has perennial problems with building reserves of hard currency and staying solvent. Even under free-marketeer Milei, who aims to bring Argentina back to global bond markets after a multi-year hiatus, Argentina has fought the case tooth and nail.

Argentina’s fiscal position has been bolstered by US President Donald Trump, who backed up his personal affinity for Milei with a US$20-billion line of credit from the US Treasury last year ahead of a crunch midterm election. Milei has paid down the US$2.5 billion he activated of the swap, although the terms for future use remain unclear.

Burford has been hoping that the lingering judgment will complicate Argentina’s plans to return to international capital markets, forcing the government to reach a settlement. Argentina previously resolved claims by Elliott Management’s Paul Singer, who purchased defaulted Argentine bonds and then waged a 15-year legal battle to secure a US$4.6 billion settlement.

Milei flew to New York last week to tout Argentina investments, but has decided to halt his plan of tapping markets in 2026, casting doubt over how the South American giant will face paying US$15 billion in debt service this year, including US$4.2 billion on global bonds coming due in July. 

Inflation in Argentina was higher than analysts expected last month, while growth in 2025 was tepid, with an uneven recovery favoring capital-intensive sectors like oil and gas, and hurting labor-intensive construction and manufacturing.

The case is Petersen Energia Inversora v. Argentine Republic, 15-v-02739, US District Court, Southern District of New York (Manhattan).