A Court in the United States on March 27, overturned a $16.1 billion judgment against Argentina, decisively ruling that the 2012 nationalization of its state oil company was lawful.

This landmark decision dismisses the multi-billion dollar indemnities demanded by vulture funds, eliminating a significant financial threat to Argentina’s public finances and solidifying the company’s role as a strategic state-controlled asset vital for national energy independence.

The United States Court of Appeals for the Second Circuit in Manhattan on Friday annulled the $16.1 billion judgment that had been imposed against the Argentinean State following the 2012 nationalization of Yacimientos Petrolíferos Fiscales, S. A (YPF). This pivotal judicial decision explicitly confirms that the nationalization process, executed 14 years ago, fully complied with the established legal framework, and critically, that the company’s statutes cannot supersede the National Constitution.

“The judgment of the district court in favor of the plaintiffs on their breach of contract claims against Argentina is reversed” and “we affirm the judgment of the district court in favor of YPF” , stated the ruling, issued after a decade-long litigation, in a definitive closure to a protracted legal battle, protecting Argentina’s treasury from a monumental financial obligation.

Former Argentinean President Cristina Fernández de Kirchner celebrated the ruling, emphasizing that the recovery of the oil company was a strategic political decision that enabled the development of Vaca Muerta region, a vast shale oil and gas reserve, thereby generating an energy surplus for the country. “It is clear that the political decision to recover YPF and our energy sovereignty was strategic for our country”, she eclared via social media.

Text reads: “As a former President and as an Argentine citizen, my thanks to the staff of lawyers from the Sullivan & Cromwell LLP firm who carried out the defense of the Argentinean State, starting in January 2020, in the YPF case that was being handled before the courts of New York. As a lawyer, I congratulate you for having supported the legal arguments of Argentina that the provisions of the Statute of a society cannot prevail over the National Constitution and the legal system of a country… that it is nothing less than recognizing the sovereignty of States…”

Despite the overwhelmingly favorable result for the country, far-right President Milei controversially insulted those responsible for the 2012 nationalization. He attributed the resolution to his supposed good relationship with the Donald Trump administration.

This political appropriation underscores the deep ideological divides within Argentina’s political landscape concerning national economic policy and resource control.

Text reads: “We won YPF’s trial. The Chamber has just fully overturned the conviction against Argentina: the best possible scenario (and with less than 15% probability of occurrence). This implies that Argentina must not pay anything of the approximately USD 18 billion today (a little more than what was the IMF loan in 2024). It is historical, thoughtlessly, the greatest legal achievement in national history.”

Legal Arguments Prevail

The Appeals Court’s ruling specifically revokes the indemnification originally ordered in September 2023 by U.S. District Judge Loretta Preska in Manhattan. Preska’s initial judgment had favored former YPF shareholders, Petersen Energía Inversora and Eton Park Capital Management, for alleged losses tied to the nationalization.

The original sums included $14.39 billion for Petersen Energía Inversora and $1.71 billion for Eton Park Capital Management, plus $7.67 billion in pre-judgment interest at an 8% rate, totaling $16.1 billion. Argentina had also recently appealed Preska’s June 2025 order to hand over YPF shares to partially satisfy the judgment, an order which the Second Circuit also annulled.

Among its arguments, the Appeals Court largely adopted the reasoning of the Republic of Argentina’s legal representatives, who contended that a corporation’s statutes are “multilateral organizational contracts” and do not generate bilateral obligations that permit lawsuits. In this crucial aspect, the Court considered that even if a bilateral contract were deemed to exist, such claims are prohibited by Argentina’s General Expropriation Law, which prevents third-party actions that “obstruct” an expropriation or its effects.

In essence, the U.S. Court upheld the argument previously put forth by then President Cristina Kirchner: no U.S. court can override Argentine legislation or the National Congress that authorized the nationalization.

The Appeals Court’s ruling in Manhattan also ratified the dismissal of “promissory estoppel” claims (the doctrine of one’s own acts), as under Argentine law, this is not an autonomous source of obligation when a contractual relationship already exists. However, the Court did not rule on whether the case should have been litigated in Argentina.

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