Second Circuit Reverses $16.1 Billion Judgment in Petersen v. Argentina
LBKM represented alliance of Argentine provinces as amicus in landmark $16.1 billion reversal
On March 27, 2026, the U.S. Court of Appeals for the Second Circuit issued a significant decision in Petersen Energía Inversora S.A.U. et al. v. Argentine Republic, reversing the $16.1 billion judgment entered by Judge Preska of the Southern District of New York against the Republic of Argentina.
The case arises from Argentina’s 2012 expropriation of a controlling stake in YPF S.A. Minority shareholders alleged that the Republic breached YPF’s corporate bylaws by failing to conduct a tender offer following the expropriation. The district court agreed and entered a multibillion-dollar judgment in favor of the plaintiffs.
The Second Circuit reversed that judgment. Rejecting Judge Preska’s analysis of Argentine law, the Court held that:
• The shareholders’ breach of contract damages claims are not cognizable under Argentine law;
• The bylaws of the company did not create enforceable bilateral obligations among shareholders capable of supporting those claims; and
• Argentina’s public law framework governing expropriation precludes the asserted contractual recovery theory.
Lewis Baach Kaufmann Middlemiss PLLC represented the Organización Federal de Estados Productores de Hidrocarburos, or Federal Organization of Hydrocarbon Producing States (OFEPHI), an alliance of Argentine provinces, as amicus curiae in support of the Argentine Republic. The firm’s submission addressed key issues of Argentine law, including the nature of corporate bylaws and the role of Argentina’s public law framework governing expropriation. Read the full brief and decision below below.
This decision marks a major reversal of one of the largest sovereign judgments ever issued by a U.S. court and provides important guidance on the interaction between foreign sovereign acts, corporate governance instruments, and U.S. litigation.
Related:
· LBKM files amicus brief in Petersen v. Argentine Republic (2024)