Back to Square One: The Argentine Supreme Court Sounds the Retreat on the Rural Land Law

Ten days after dismissing litigation that had enjoined the Milei Administration’s repeal of the Rural Land Law, the Argentine Supreme Court ordered an injunction in a different case, Árbol de Pie. On its face, this second case is the same as its recent predecessor. Read on to understand the Court’s apparent change of course and what it means to foreign investors interested in Argentine rural land.

In our last article on Argentina’s Rural Land Law, we reported on the Supreme Court’s dismissal of a case brought by a Malvinas Veterans non-profit interest group. That case, a class action alleging an unconstitutional exercise of executive power by the Milei administration’s repeal of a law, prompted a nationwide federal court injunction to stay the repeal in February 2024. This injunction meant the law remained in effect and foreign investor purchases of rural land were largely shelved pending an outcome of the case.

Last week, the Milei government and its supporters cheered the Supreme Court’s decision to dismiss the case. Although made on procedural grounds (the Malvinas Veterans’ lack of standing to bring a class action), the ruling appeared to clear the way for foreign purchases of rural land, at least until there was a review of the constitutional issue (whether the Rural Land Law could be repealed by executive order) or the Milei administration could push a law through congress to bury or modify the Rural Land Law. Árbol de Pie has thrown a cold-water splash on that brief celebration.

In Árbol de Pie, a non-profit environmental interest group, together with indigenous communities, had brought a similar action to nullify the repeal of the Rural Land Law. The plaintiffs claimed the repeal undermined national sovereignty, threatened environmentally sensitive land, and disrupted Argentina’s guarantees for indigenous communities. As with the Malvinas Veterans case, the plaintiffs obtained an injunction (but this time directly from the Supreme Court), pending a lower court ruling on the plaintiffs’ standing to sue.

The Supreme Court reviewed the case after the plaintiffs sought clarification on the impact of the Court’s ruling in the Malvinas Veterans’ case. While acknowledging the similarity of claims, the plaintiffs in Árbol de Pie emphasized that their class representation also included the defense of environmental rights and indigenous communities. Two justices of the court (Rosatti and Lorenzetti) were joined by ad hoc justices Peréz Curci and Barroetaveña in an opinion that agreed with the plaintiffs, remanding the case to the lower court for a finding on the standing issue.

Curiously, however, and just days after lifting an injunction in Malvinas Veterans, the majority granted an injunction until that lower court ruling. Justice Rosenkrantz wrote a visceral dissent criticizing the granting of the injunction, as, in his view, the Supreme Court lacked jurisdiction to grant interim equitable relief, absent the plaintiffs’ showing of a concrete, imminent, or irreversible environmental risk.

Simply put, the injunction granted in Árbol de Pie means the Rural Land Law remains in force.

As a result, the restrictions previously imposed on foreign ownership of rural land continue to apply. Nonetheless, the legal and political debate surrounding the Milei administration’s sweeping executive order (Decree No. 70/2023) remains far from settled. Local media reports that opposition lawmakers are pushing for a special session of congress later this month to overturn some or all of that executive order.

In the meantime, the future of the Rural Land Law continues to be uncertain and windows of opportunity brief. Interested investors should be ready to move quickly if the constitutional challenges are overcome or if congress endorses the repeal. Until the Supreme Court or the legislature provides greater certainty, rural land purchases must be carefully assessed amidst a volatile legal and political back-and-forth.