New York federal judge, Loretta Preska, will decide this Monday whether Argentina will be able to suspend the transfer of 51% of YPF's shares while the appeal against the ruling that requires Argentina to hand over that share package to the litigating funds Burford and Eton Park is processed.
The decision is crucial for the national government, which seeks to avoid the immediate enforcement of the ruling issued in September 2023, which establishes compensation exceeding 17 billion dollars. Preska's decision comes in a context of intense judicial and financial pressure.
The Argentine request and the risk of losing control of YPF
Argentina filed the formal appeal last week before the Second Circuit Court and requested a “stay”, that is, the temporary suspension of the enforcement of the judgment. This measure seeks to prevent the State from losing control over YPF during the judicial process.
According to the Executive's legal strategy, transferring the shares now would mean “irreparable harm,” since the beneficiary funds could immediately sell the shares, preventing a possible reversal of the ruling.
Legal arguments: sovereign immunity and Argentine laws
The Argentine defense argues that Preska's court order violates the Foreign Sovereign Immunities Act (FSIA) and represents an improper exercise of extraterritoriality. In addition, they emphasize that the 2012 expropriation law requires a special majority in Congress to transfer the state's share package in YPF, which did not occur.
Argentina espera el fallo clave de Loretta Preska por el caso YPF
For the ruling party, complying with the ruling without exhausting judicial remedies would be a violation of national sovereignty, especially amid negotiations over external debt and fiscal adjustment.
Milei and Caputo closely follow the case
President Javier Milei and Economy Minister, Luis Caputo, are monitoring every step of the case. Caputo coordinated with the Treasury Attorney General's Office to strengthen the appeal and prevent an outcome that would compromise the country's financial position.
In addition, escalating the conflict to the United States Supreme Court is being considered if the Second Circuit Court doesn't reverse the situation.
What happens if Preska rejects the request?
If the judge denies the suspension, the litigating funds could proceed with the seizure and enforcement of the shares, which would directly endanger state control over YPF. If, on the other hand, she grants the “stay,” Argentina would gain crucial time to continue its defense and negotiate.
According to analyst Sebastián Maril, if Preska grants the request, “the beneficiaries of the ruling will not be able to enforce the judgment while Argentina appeals.”
What the market says and the potential impact
In the financial sphere, the YPF case is being closely followed by consulting firms, banks, and investment funds. An adverse ruling could impact country risk, the price of bonds, and YPF shares, in addition to complicating access to external financing.
YPF's role and the precedent of the expropriation
Although YPF is not a formal party to the current process, its fate is directly involved. The president of the oil company, Horacio Marín, clarified that the company is not part of the legal strategy, which is being handled by the Argentine State.
The controversy began in 2012, when the government of Cristina Kirchner expropriated 51% of YPF belonging to Repsol. Although there was an agreement with the Spanish oil company, other minority shareholders were not compensated, which led to the international lawsuit.
