Reversing the largest judgment ever entered in the Southern District of New York, the U.S. Court of Appeals for the Second Circuit vacated an “unprecedented” $18 billion judgment (with interest) in a case arising out of the Republic of Argentina’s expropriation of shares in YPF, the country’s largest energy company. The court held that the plaintiffs’ contract-based damages claims based on YPF’s bylaws were not cognizable under Argentine civil or corporate law. Alternatively, the court held that plaintiffs’ claims were precluded by Argentina’s General Expropriation Law, which provides a comprehensive regime for expropriation-related claims.
Argentina President Javier Milei called this victory “historic, unthinkable, the greatest legal achievement in national history.”
In 2023, a judge in the Southern District of New York entered a $16.1 billion judgment against the Republic in litigation brought by two YPF minority investors. The plaintiffs claimed that when Argentina expropriated a majority stake in YPF from Spain's Repsol in 2012, it should have made a tender offer to minority shareholders.
The Court of Appeals emphasized that the litigation had impermissibly interfered with the Republic’s expropriation regime by “saddl[ing] the Republic with ten years of litigation and a damages award representing 45 percent of its annual national budget.”
Last August, S&C persuaded the Second Circuit to grant a stay of the district court’s order requiring Argentina to turn over its 51 percent stake in YPF to partially satisfy the judgment while it was on appeal. The United States government filed an amicus brief in support of the stay, explaining that the issues in this case have “significant ramifications for the United States’ foreign relations and may affect the reciprocal treatment of the United States and its property in the courts of other nations.” The court’s decision reversing the judgment also vacated that turnover order.
The S&C team representing the Republic of Argentina includes Robert Giuffra, Jr. (who argued the appeal), Sergio Galvis, Amanda Davidoff, Thomas White, Adam Brebner, Pedro José Izquierdo and Arturo Carlos Schultz.