The ruling — a dramatic effort to enforce a $16 billion U.S. court judgement against Argentina — presents a new headache for libertarian President Javier Milei, the ideological foil for left-wing former President Cristina Fernández de Kirchner who oversaw Argentina’s contentious takeover of YPF and ensuing legal battles during her tenure (2007-2015). Milei vowed to appeal the ruling.

Fernández’s abrupt move to seize control of YPF at the time helped bring serial defaulter Argentina further infamy for abandoning its global financial obligations. Milei inherited an economy in shambles after decades of reckless state spending and campaigned on pledges to privatize state companies.

In granting the request of former shareholders largely represented by Burford Capital, which finances litigation in return for a share of the winnings, Judge Loretta Preska of the Southern District of New York gave Argentina two weeks to transfer its shares in YPF to Bank of New York Mellon Corp, the major U.S. custody bank, according to the ruling seen by The Associated Press.

Because YPF is listed on the New York Stock Exchange, the plaintiffs could file the lawsuit in a U.S. district court. Shares of YPF closed down 5.6%.

The judgement stems from a long-running legal case that in 2023 saw Judge Preska find Argentina liable for $16.1 billion in damages and interest. The plaintiffs argue that the government should have launched a tender offer for stakes held by minority shareholders.

Milei, whose government has struggled to build up depleted foreign reserves, has vowed to appeal the ruling “to defend national interests” and blamed the problem on his political rivals.

“More than 10 years have passed, and we Argentines continue to suffer the consequences of the worst government in Argentine history,” he wrote on social media platform X.

Marcelo J. García, Director for the Americas at the New York-based Horizon Engage risk consultancy, said the ruling was “a reminder for the Milei administration that the country’s problems will not go away just because he blames the opposition for them.”

“Control of YPF is important for Milei; that’s why an appeal is the only option for him,” he added.

Paying up and losing the controlling stake in YPF — which has become a pillar of the economy — would cripple Argentina at a crucial moment for Milei’s government.

YPF has accelerated its drive to develop the country’s huge reserves of shale gas in the Vaca Muerta field in Argentine Patagonia. Crude production at Vaca Muerta has steadily climbed, hitting record production in May at 448,000 barrels per day, 22.5% more than the same month in 2024, according to official data.

In 2024, YPF notched a net profit of almost $2.4 billion, up from a $1.3 billion loss the year before.

Milei has hoped to leverage investments in the Vaca Muerta field to cure the nation’s long-standing fiscal weakness and pay its massive deficits.