A panel of U.S. judges is reconsidering whether Argentina should be compelled to pay investors $16.1 billion following its 2012 seizure of state-owned oil company YPF. During a hearing on Wednesday, at least two judges on the panel questioned whether the case properly belonged in the United States legal system. The proceedings are part of Argentina’s appeal against a prior ruling.
The three-judge panel of the 2nd U.S. Circuit Court of Appeals in Manhattan is reviewing Argentina’s attempt to overturn a September 2023 award made to two minority shareholders of YPF. Argentina contends that the case should have been adjudicated within its own legal system, challenging the U.S. judge’s interpretations of Argentine law. The core issue revolves around the nationalisation of YPF and its impact on minority shareholders.
Burford Capital, a litigation finance firm, has significantly funded the legal actions taken by the plaintiffs. Burford specialises in providing capital to law firms and companies involved in disputes, in exchange for a share of any potential proceeds. Should the award be upheld, Burford Capital stands to receive a substantial portion of the $16.1 billion.
The uncertainty surrounding the case has already affected Burford Capital’s market value. Following the judges’ remarks, shares in Burford Capital experienced a sharp decline, falling by more than 10% as investors reacted to the potential implications of a shift in jurisdiction or an unfavourable outcome.
