The United States Court of Appeals for the Second Circuit has temporarily suspended New York Judge Loretta Preska’s order to Argentina to grant its shares of the YPF energy company to the Burford Capital hedge fund.

On June 30, Preska ordered Argentina to hand over 51% of its shares of the company as a partial payment to plaintiffs who in 2023 won a US$16.1 billion lawsuit over the company’s 2012 nationalization. Last week, Argentina appealed the order. On Monday, Preska rejected the country’s request to stay the order while the appeal was resolved.

But on Tuesday, the Court of Appeals granted a temporary administrative stay, pending the resolution of Argentina’s appeal. Now, Burford must file an opposition to the motion by July 17, and Argentina must file an answer by July 22. A three-judge panel will then review the stay motion filed by Argentina.

Preska had extended an existing stay until July 17 to grant the parties more time to handle the case, but that deadline is no longer in place. 

“There is no more risk of [Argentina falling into] contempt of court — it is a major setback in the New York courts in favor of Argentine sovereignty,” a spokesperson in the Treasury Prosecution Office told the Herald.

The case could be traced back to 2012, when Argentina’s Congress expropriated 51% of YPF shares from Spanish multinational Repsol, which was the majority shareholder at the time, giving the state majority control of the company.

Three years later, Burford Capital bought the trial rights for three companies that owned part of the remaining shares — Petersen Energia Inversora, Petersen Energía, and Eton Park. Burford took Argentina to court, claiming the country had failed to make a tender offer to buy their YPF shares when it nationalized the company, incurring significant losses for them as a result. 

In September 2023, Preska ordered Argentina to pay the plaintiffs US$16.1 billion for breach of contract during the nationalization.

Meanwhile, the case is very present in the local media, politics, and economy. For example, several analysts say that Preska’s ruling was one of the main reasons for the dollar exchange rate to soar to almost AR$1,300 in recent days.