Actually Milei was the most important person of all, without his special relationship with Trump no-one in the USA would have known or,cared about the case especially with the war in Iran. Lazy incompetent judges would have just upheld the verdict to start their weekend early. Milei is why they overturned it. Thankyou President Milei
Actually no this isn't true. Milei didn't have anything to do with this outcome. He wants people to think he does but that's not how it works. Trump either. People don't know how the court systems work here. These judges were Democrat placed. They are there for life. They certainly aren't going to listen to anything Trump or Milei says.
Thanks Mike, that is very well written. I understand the populist reaction but seeing every politician try to take credit for it like Argentina just won the World Cup, it sends all the wrong signals.
That is what annoys me. You have everyone under the sun now trying to take credit for this. It boggles my mind that is the approach they are taking. Milei did a press conference last night trying to take credit. People wonder why there is net negative foreign investments under Milei.
A top Canadian fertilizer company is the latest to leave Argentina, amid a wave of foreign companies selling their operations to local businesses
buenosairesherald.com
Even the judge ruling in favor had this warning:
US Circuit Judge Denny Chin authored a scathing assessment of Argentina's behavior, even while ruling in their favor on a technicality of Argentine law.
Argentina's "refusal to honor those protections two decades after making them cast doubt on the security of foreign investment in the country more broadly."
The court explicitly noted that Argentina had made a "knowing and flagrant violation of the promises it made to foreign investors," and pointed out that Argentina originally made those bylaws specifically to assure US investors that their capital would be protected. The fact that the court acknowledged Argentina broke its promise -but ruled they couldn't be punished for it under local law -is exactly what terrifies foreign capital and probably what will keep much FDI on the sidelines.
Industry publications covering the intersection of law and energy investment, such as Discovery Alert and Investment Arbitration Reporter, published analyses today breaking down the new risk matrix for energy companies.
They highlight that this ruling fundamentally alters how sovereign risk is calculated. Because a $16.1 billion expropriation liability was erased on an appellate reinterpretation of local law, legal experts are advising that:
Foreign companies can no longer rely on standard corporate bylaws when dealing with sovereigns.
Energy companies will now have to employ extreme "multiple jurisdiction incorporation strategies" and "treaty shopping" to try and artificially shield their assets from future expropriations.
The sentiment among institutional investors is highly negative regarding the precedent this sets. As one market commentator on Seeking Alpha bluntly summarized the mood on Wall Street today:
"Terrible, terrible decision by the court. Green light for government nationalizations going forward for any and all US traded companies!"
While President Javier Milei is publicly celebrating this as the "greatest judicial victory in national history" because it saves the country from immediate bankruptcy, the global financial press and the US justice system itself is openly warning that this "knowing and flagrant violation" serves as a massive red flag for anyone looking to park long-term capital in Argentina.
