Former investors in YPF SA, the Argentine state-controlled energy firm, formally notified a U.S. federal court on April 22, 2026, of their intention to initiate international treaty arbitration against the Republic of Argentina. The announcement follows the recent reversal of a $16.1 billion judgment by the U.S. Second Circuit Court of Appeals, which had previously been the largest award ever handed down by the Southern District of New York in a case of this nature.
During a status conference on Tuesday, April 21, 2026, legal counsel representing the investors informed U.S. District Judge Loretta Preska that the plaintiffs seek to transition their claims to an international arbitration forum. The investors requested the court’s authorization to transfer and utilize discovery materials, including thousands of documents and deposition testimonies obtained during years of U.S. litigation, to support the new arbitration proceedings. The legal team emphasized that this move does not signal an abandonment of the U.S. court system, as they concurrently plan to challenge the appellate court’s March 27 reversal through the American judicial process.
The long-running legal dispute centers on the 2012 nationalization of YPF, during which the Argentine government seized a 51% controlling interest in the oil producer from Spain’s Repsol SA. Minority shareholders, led by Petersen Energia Inversora and Eton Park Capital Management, argued that Argentina was legally required under YPF’s bylaws to launch a tender offer for the remaining shares. In 2023, Judge Preska ruled in favor of the investors, determining that Argentina had violated its contractual obligations and awarding $16.1 billion in damages and interest.
However, the U.S. Second Circuit Court of Appeals overturned that decision on March 27, 2026. In a 2-1 majority opinion written by Circuit Judge Denny Chin, the panel concluded that the district court had erred in its interpretation of Argentine law and the extent to which U.S. courts could adjudicate the actions of a foreign sovereign. The court held that the plaintiffs' breach of contract claims were not cognizable under Argentina’s civil code and public law governing expropriation. The reversal removed the immediate threat of asset seizures against Argentina, which has struggled with severe economic volatility. Judge José Cabranes dissented, arguing that the district court’s original findings were correct.
Burford Capital Ltd., the litigation funder that has bankrolled the case for nearly a decade, confirmed its support for the dual-track strategy of arbitration and further U.S. appeals. Following the appellate ruling, Burford shares experienced a significant decline, falling approximately 40% in both New York and London trading. The firm indicated it is considering a petition for a rehearing by the full Second Circuit bench or an appeal to the U.S. Supreme Court. The arbitration path would likely involve claims under bilateral investment treaties, which provide a different legal framework for addressing the treatment of foreign investments by sovereign states. Argentina has not yet issued a formal response to the arbitration notice.