US Court Suspends YPF Expropriation Litigation Proceedings, Backing Argentina’s Appeal

The Court of Appeals in New York granted Argentina’s urgent petition to halt discovery processes, contempt motions, and related enforcement actions tied to the YPF expropriation case until it resolves the substantive appeal challenging the initial ruling. This decision prevents further legal steps aimed at uncovering internal governmental communications and locating Argentine assets in the United States, including sensitive requests like details on Central Bank gold reserves. The ruling arrives shortly after Sebastián Amerio’s appointment as Argentina’s Treasury Attorney and reflects a notable relief for the country amidst multimillion-dollar claims from litigation funders such as Burford Capital, which had aggressively pursued accelerated enforcement and asset turnover orders.

The US Department of Justice filed a memorandum backing Argentina’s suspension request, citing that current discovery demands imposed by Judge Loretta Preska were excessively intrusive, risking violations of established norms of sovereign immunity enforced under the Foreign Sovereign Immunities Act (FSIA). The memorandum emphasized potential diplomatic tensions and warned that unchecked discovery could trigger reciprocal foreign legal actions against US sovereign interests abroad. Argentina asserts its state assets are protected by sovereign immunity and are legally distinct from the government itself, forming the basis to reject demands probing such resources.

Market analysts, including Sebastián Maril from Latam Advisors, interpret the court’s decision as a strong indication that the appellate judges will soon issue a ruling on the core dispute, making ongoing extensive discovery unnecessary. The suspension sets a precedent underscoring US courts’ recognition of sovereign immunity principles in complex transnational litigations, providing Argentina with a critical procedural respite while the appeal is pending.