The US Supreme Court has ruled that Argentina must pay British company BG Group $185m for losses arising from the country's 2001-2002 economic crisis.
The US high court endorsed a lower court's ruling in the case that a US-based tribunal had the power to settle the dispute between the two sides based on their original contract under Argentine law.
BG Group, which had a large stake in Buenos Aires gas monopoly MetroGas, had sought compensation after the government in Buenos Aires unilaterally changed the basis of gas prices from US dollars to pesos and froze the prices during the crisis.
In 2007, the US-based tribunal backed part of its claim, that it had losses related to unfair treatment, and after that a federal district court confirmed the $185m award.
But subsequent to that, the Washington DC federal appeals court overruled the district court, saying the arbitrators lacked the authority to decide the complaint in part because BG Group had not first pursued its claims inside Argentina.BG Group then appealed the case to the Supreme Court, which ruled 7-2 in its favor.
The arguments pitched the two sides' interpretations of an investment treaty between Argentina and Britain, particularly issues dealing with dispute settlement and expropriation. Buenos Aires questioned the tribunal's power to excuse BG Group for not having pursued the matter in local venues.
But the Supreme Court said: "While Argentina is entitled to court review ... of the arbitrators' decision to excuse BG Group's noncompliance with the litigation requirement, that review shows that the arbitrators' determinations were lawful."
telegraph.co.uk
The US high court endorsed a lower court's ruling in the case that a US-based tribunal had the power to settle the dispute between the two sides based on their original contract under Argentine law.
BG Group, which had a large stake in Buenos Aires gas monopoly MetroGas, had sought compensation after the government in Buenos Aires unilaterally changed the basis of gas prices from US dollars to pesos and froze the prices during the crisis.
In 2007, the US-based tribunal backed part of its claim, that it had losses related to unfair treatment, and after that a federal district court confirmed the $185m award.
But subsequent to that, the Washington DC federal appeals court overruled the district court, saying the arbitrators lacked the authority to decide the complaint in part because BG Group had not first pursued its claims inside Argentina.BG Group then appealed the case to the Supreme Court, which ruled 7-2 in its favor.
The arguments pitched the two sides' interpretations of an investment treaty between Argentina and Britain, particularly issues dealing with dispute settlement and expropriation. Buenos Aires questioned the tribunal's power to excuse BG Group for not having pursued the matter in local venues.
But the Supreme Court said: "While Argentina is entitled to court review ... of the arbitrators' decision to excuse BG Group's noncompliance with the litigation requirement, that review shows that the arbitrators' determinations were lawful."
telegraph.co.uk
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