Abstract
Foreign investment has played an inportant role in Argentina’s economic development process practically since the biginning of the modern state. A decisive factor in the promotion of Foreign Direct Investments (FDI) since the 1990s has been the adaptation of local regulatory systems to accommodate these new forms of international investment. This motivated, among other actions, the modification of public order norms for the incorporation of foreign subjects in the participation (among other matters) in the administration of public services or the elimination of legal restrictions that prevented the submission of States to foreign or international jurisdictions.
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Notes
- 1.
Article 20.- Foreigners enjoy in the territory of the Nation all the civil rights of citizens; they may exercise their industry, commerce, and profession; own real estate, buy and dispose of it; navigate the rivers and coasts; freely exercise their worship; testament and marry according to the laws. They are not obliged to admit citizenship, nor to pay extraordinary forced contributions. They obtain nationalization by residing two continuous years in the Nation; but the authority can shorten this term in favor of the one who requests it, alleging and proving services to the Republic.
- 2.
- 3.
Slame (1981), p. 20.
- 4.
- 5.
Decree 1853/93. Foreign investors who invest capital in the country, in any of the forms outlined in Article 3 for the promotion of economic activities, or for the expansion or improvement of existing ones, shall have the same rights and obligations that the Constitution and the laws grant to domestic investors, subject to the provisions of this law and those contemplated in special or promotional regimes.
- 6.
Section 3 adds that the concept of foreign investor includes Argentine individuals or legal entities domiciled outside the national territory.
- 7.
- 8.
Bonchil (1994), p. 732.
- 9.
Although by the end of the 1990s there had been some cases of investor claims before the courts, it was after the modification of the exchange rate system and the enactment of the 2002 emergency laws that the number of investor arbitration claims increased exponentially, reaching almost half a hundred lawsuits for violation of investment agreements for economic estimates of close to US$ 75 billion. The economic crisis that occurred between 2001 and 2002 caused the collapse of the country’s financial and economic system, forcing the State to issue a series of public order laws that modified the conditions agreed with investors up to that time, as a result of the agreements entered into at the beginning of the 1990s. As a result of the crisis, the Argentine State enacted Law 25,651, which declared the public emergency of the State until December 10, 2003, but which the National Congress has been extending until the present time. This law modified the scope of Law 23,923 of 1991 (known as the convertibility law), which established parity between the Argentine peso and the U.S. dollar, which led to the elimination of the tariff adjustment system held by the concessionaires of public utilities, most of which were in the hands of foreign investors. Such a tariff adjustment system was based on the United States Producer Price Index (US PPI), whereby tariffs were calculated in dollars and converted into pesos for the same amount and readjusted every 6 months. With the enacted emergency, the adjustment mechanisms were frozen and the national exchange rate system was specified. This change in the conditions under which investors had agreed to collect their profits, together with the amendments to other regulations on legal stabilization clauses provided for in the BITs or the cancellation of public service concession contracts, led to the filing of claims before various arbitration tribunals (mainly before ICSID). As a result of the laws enacted, in 2003 the national government initiated a process of renegotiation of contracts with investors, mainly public service providers, through Decree 311/03, to which few companies agreed, renouncing, in turn, to file claims before foreign courts.
- 10.
Signed on 08/19/2010 and published in the Official Gazette on 08/27/2010, p. 1. Accessed at http://infoleg.mecon.gov.ar/infolegInternet/anexos/170000-174999/171086/norma.htm.
- 11.
Cristini and Bermúdez (2022), p. 24.
- 12.
Law 27.328. Public-Private Contract Law. November 16, 2016.
- 13.
Cristini and Bermúdez (2022), p. 11.
- 14.
MERCOSUR/CMC/DEC N° 11/94. Approved on August 5, 1994.
- 15.
MERCOSUR/CMC/DEC/11/93. Signed on January 17, 1994 (not yet in force. Not ratified by any State Party of MERCOSUR). See on the subject: Chudnovsky and López (2000).
- 16.
MERCOSUR/CMC/DEC. N° 30/10. Signed on December 16, 2010.
- 17.
- 18.
UNCTAD. Word Investment Report. (2020).
- 19.
Cristini and Bermúdez (2022), pp. 37–38.
- 20.
The first BIT signed by the Argentine Republic was with Italy (May 22, 1990), approved by Law 24,122.
- 21.
The Argentine Republic entered into bilateral treaties on the protection and promotion of foreign investments (BITS) with more than 50 countries. Among them, we can mention: People’s Democratic Republic of Algeria: Date of signature: 04/10/2000; approving law: 25.538/02; Republic of India: Date of signature: 20/08/99; approving law: 25.540/2002; Republic of New Zealand: Date of signature: 08/27/99; enabling law: 25.539/2002; Thailand: Date of signature 02/18/2000; enabling law: 25.532/02; Philippines: Date of signature 09/20/99; enabling law: 25.481/01; Guatemala: Date of signature: 04/21/98; enabling law: 25.350/00; Republic of South Africa: Date of signature: 07/23/98; enabling legislation: 25.352/00; Nicaragua: Date of signature: 08/10/98; enabling legislation: 25.351/00; Russian Federation: Date of signature: 06/25/98; enabling legislation: 25.353/00; Costa Rica: Date of signature: 05/21/97; enabling legislation: 25.139/99; El Salvador: Date of signature: 09/05/96; enabling law: 25.023/98; Czech Republic: Date of signature: 27/09/96; enabling law: 24.983/98; Lithuania: Date of signature: 14/03/96; enabling law: 24.984/98; Panama: Date of signature: 10/05/96; enabling law: 24.971 /98: Mexico: Date of signature: 13/11/96; enabling law: 24.792/98; Morocco: Date of signature: 13/06/96; enabling law 24.890/97; Indonesia: Date of signature: 07/11/95; enabling law: 24.814/97; Cuba: Date of signature: 30/11/95; enabling law: 24.770/97; Vietnam: Date of signature: 03/06/96; enabling legislation: 24.778/97; Israel: Date of signature: 23/07/95; enabling legislation: 24.771/97; Australia: Date of signature: 23/08/95; enabling legislation: 24.728/96; Republic of Korea: Date of signature: 17/05/94; enabling legislation: 24.682/96; Ukraine: Date of signature: 09/08/95; enabling law: 24.681/96; Peru: Date of signature: 10/11/94; enabling law: 24.680/96; Malaysia: Date of signature: 06/09/94; enabling law: 24.613/96; Finland: Date of signature: 05/1l/93; enabling law: 24.614/96; Portugal: Date of signature: 06/10/94; enabling law: 24.593/95; Croatia: Date of signature: 02/12/94; enabling law: 24.563/95; Jamaica: Date of signature: 08/02/94; enabling law: 24.549/95; Venezuela: Date of signature: 16/11/93; enabling law: 24.457/95: Ecuador: Date of signature: 02/18/94; enabling law: 24.459/95; Romania: Date of signature: 07/29/93; enabling law: 24.456/95; Bolivia: Date of signature: 03/17/94; enabling law: 24.458/95; Senegal: Date of signature: 04/06/93; enabling law: 24.396/94;. Bulgaria: Date of signature: 09/21/93; Adoptive law: 24.401/94; Armenia: Date of signature: 04/06/93; Adoptive law: 24.395/94; Tunisia: Date of signature: 06/17/92; Adoptive law: 24.394/94; Denmark: Date of signature: 11/06/92; Adoptive law: 24.397/94; Turkey: Date of signature: 08/05/92; Adoptive law: 24.340/94; Hungary: Date of signature: 05/02/93; Adoptive law: 24.335/94; People’s Republic of China: Date of signature: 05/11/92; Adoptive law: 24.324/94; Republic of Austria: Date of signature: 07/08/92; enabling legislation: 24.238/94; Egypt: Date of signature: 11/05/92; enabling legislation: 24.248/93; Netherlands: Date of signature: 20/10/92; enabling legislation: 24.352/94: Great Britain and Northern Ireland: Date of signature: 1/12/90; enabling legislation: 24.184/92; Belgium and Luxembourg: Date of signature: 6/28/90; enabling legislation: 24.123/92; Canada: Date of signature: 11/05/91; enabling legislation: 24.125/92; USA: Date of signature: 11/05/91; enabling legislation: 24.125/92. USA: Date of signature: 11/14/91; enabling legislation: 24.124/92; Sweden: Date of signature: 11/22/91; enabling legislation: 24.117/92; Spain: Date of signature: 10/03/91; enabling legislation: 24.118/92; France: Date of signature: 07/03/91; enabling legislation: 24.100/92; Germany: Date of signature: 04/09/91; enabling legislation: 24.098/92; Switzerland: Date of signature: 04/12/91; approving law: 24.099/92; Poland: Date of signature: 07/31/91; approving law: 24.101/92; Chile: Date of signature: 08/02/91; approving law: 24.342/93; Italy: Date of signature: 05/22/90; approving law: 24.122/92. To this must be added the Buenos Aires Protocol for the Promotion and Protection of Investments from States not party to MERCOSUR: Date of signature: 04/08/1994, approving law 24.554 and the Convention on the Settlement of Investment Disputes between States and nationals of other States. Date of signature: 03/18/1965; approving law: 24.353/94. (B.O. 02/09/94).
- 22.
See Kauffmann-Kohler and Postetà (2020), p. 39.
- 23.
- 24.
Ghiotto and Guamán (2018), p. 4.
- 25.
Dolzer and Schreuer (2008), p. 119; Ymaz Videla (1999); Granato (2005); Tawil (2000), p. 1106; Barraguirre and Manzi (2010), pp. 145–188; Schreuer (2005), p. 356. The standard of fair and equitable treatment finds its first expression in the Havana Charter of 1948, when the first attempt was made to establish an international body for trade. It was subsequently raised in the drafts of the Abs-Schawcros Convention of 1960 and the Convention on the Protection of Property Abroad within the framework of the OECD of 1967. With the US BITs in the early 1970s, this clause began to be incorporated. Cf. UNCTAD (1999), pp. 10 et seq.
- 26.
It is also worth mentioning that although the investor must be guaranteed a non-discriminatory treatment for those reasons that the State may argue concerning particular situations, this principle cannot be subtracted from the social and economic reality to which a State may be subjected at a given time. It is worth remembering the “Doctrine of the Community of Fortune” formulated by the jurist Luis A. Podestá in 1922, in which he expressed that the foreigner acts under a personal resolution, freely adopted, when he, or his assets, are located in another State. In making that determination he knows what are the foreseeable advantages and disadvantages, and he enters to participate in the material and moral alternatives of the new environment in which he has decided to act. Like the other inhabitants of that environment, he must enjoy the benefits they enjoy and cannot escape the evils they suffer. A tacit pact is thus established between the State and the foreigner, a relationship of coexistence, which creates a bond of reciprocal solidarity, a true “community of fortune”. See Podestá Costa and Ruda (1979), p. 410.
- 27.
ICSID. CMS Gas Transmission vs Argentine (2001). CMS’s claim (as a minority shareholder of the company Transportadora del Gas del Norte) was made due to the lack of adjustment of tariff adjustments in the provision of the gas transportation service that the Argentine government had suspended since 2000 and that the liquidation of the tariffs calculated in dollars had been devalued as a consequence of the emergency law and the pesification of the economy. The investor argued that this implied an expropriation and a violation of the fair and equitable treatment standard.
- 28.
ICSID. Enron Corporation Ponderosa Assets LP vs Argentina (2001). The claimant filed a claim for the lack of adjustment of tariffs for the U.S. PPI that had been guaranteed by the last decree in 2000 (No. 669) and that in the same year was no longer applied, and for the calculation of tariffs in dollars as a consequence of the pesification in 2001 onwards. The investor brought the case before ICSID against the State on the grounds of direct and indirect expropriation, as well as violation of the fair and equitable treatment standard and violation of the umbrella clause for breach of the contractual obligations assumed by the State through its special rules on the regulation of the gas market.
- 29.
ICSID. LG&E Energy Corporation vs Argentine (2002). The claim of the investor engaged in the transportation of gas was based on the modification of the indexation rules of the tariffs for the provision of services, which until the State emergency law of 2002 were calculated in dollars, and at the same time, it was claimed that since 1999 the tariffs were not adjusted every 6 months as agreed between the parties. The investor also argued that the umbrella clause had been breached due to the non-compliance with the obligations assumed by the State in the area of the gas transportation system in Argentina. For its part, the State rejected the investor’s arguments, both because it considered that it did not meet the ius standi requirements to claim before ICSID and because of the exceptional circumstances that led to the enactment of the emergency laws.
- 30.
ICSID. Sempra Energy International vs. Argentina. (2002). In this case, at the beginning of the 1990s, the investor had acquired shares in the companies Sodigas Pampeana and Sodigas Sur which, in turn, held 90% and 86%, respectively, of the shares of two national companies: Camuzzi Gas Pampeana S.A. and Camuzzi Gas del Sur, which were granted licenses for gas distribution in 1996. With the economic crisis of 2000/2001, the companies were affected by a modification of the regulatory framework and tariffs in the gas market, as discussed in the CMS and Enron cases, among others, as well as for the pesification of service tariffs. The investor considered that such measures implied a violation of fair treatment and the umbrella clause of the Argentina-US BIT and brought the case before ICSID. Although the 2007 award was favorable to the investor, an ad-hoc Committee annulled the award in June 2010.
- 31.
ICSID. Azurix Corporation vs. Argentine (2001). The dispute arose from the cancellation of the concession contract for the provision of water and sewage services in the Province of Buenos Aires to the subsidiary Azurix Buenos Aires (ABA). The tribunal considered that the standard of fair and equitable treatment had been violated due to the existence of political conditions that distorted the adjustment of the tariff schedule, freezing it, and as a consequence of the precedents in other provinces (in Tucumán with the Aguas del Aconquija case).
- 32.
ICSID. Compañía de Aguas del Aconquija SA and Vivendi SA v. Argentine (2003). The investor’s claim was related to the cancellation of the contract for the provision of water and sanitation services in the City of Tucumán by the Government of the Province, as a result of disagreements between the company and the State regarding the performance of the contract. While it was recognized that the investor should have exhausted domestic remedies for the claim for breach of contract, the case was subsequently accepted for jurisdiction in violation of the Argentina-France BIT for breach of the standard of fair treatment, among others. In 2019, the State agreed to pay US$220 million to the investors Agbar and Suez, together with international groups such as Vivendi, who entered the drinking water business in the cities of Santa Fe, Córdoba, and Buenos Aires.
- 33.
ICSID. Siemens AG v. Argentine (2002). The claim before ICSID arose from the cancellation of the contract that the Argentine State had signed with the national company SITS (a subsidiary of Siemens International), which consisted of providing the service of issuing new identity documents for the country’s inhabitants as well as a new immigration control system. The government had terminated the contract in 2001 because the fees to be paid were disproportionate. ICSID accepted the claim for violation of fair and equitable treatment, expropriation, and breach of legal certainty, although after the award was rendered the company negotiated with the State not to continue with the claim.
- 34.
ICSID. TSA Spectrum de Argentina SA vs. Argentina. (2005). The case was brought to the ICSID arbitration body by the (apparent) French investor, due to the revocation by the national government in 2004 of the contract with the company for the provision of the service of radio-electric space control management in the country. The government alleged a breach of contract due to a lack of “operational synchronicity” and a collection that exceeded the rate of return. The investor filed a claim with ICSID for breach of fair and equitable treatment and for the expropriatory nature of the government’s action. However, the tribunal rejected the jurisdiction of the Center because the claimant was not a foreign investor within the meaning of the Argentina-France BIT and the Washington Convention.
- 35.
ICSID. Continental Casualty Company v. Argentina. (2003). The investor filed a claim with ICSID in 2003 against the Argentine State alleging that with the modification of the economic emergency regulations and certain measures adopted by the Argentine Government to respond to the crisis, losses were caused to Continental in breach of Argentina’s obligations under the Argentina-US BIT. 1996, the investor acquired 70% of the shares of the insurance company CNA Aseguradora de Riesgos del Trabajo, and by the year 2000 almost 100% of the shares. Continental stated that CNA, like other insurance companies, maintained a portfolio of investment securities to obtain a return on its capital, which consisted mainly of “low-risk assets, such as cash deposits, treasury bills (LETE) and government bonds”, and that, with some minor exceptions, investments were required to be made in Argentina. That with a series of regulations issued as from 2001 (Decree 1387/01-Voluntary bond exchange, Decree 1570/01 –“Corralito”, Law 25.561 of Public Emergency of 2002; Decree 214/02 by which all obligations of sums of money), the investor saw its assets confiscated, which were in dollars, constituting acts of expropriation and treatment not under fair and equitable treatment, as well as violating the umbrella clause according to the BIT guidelines.
- 36.
Faya Rodríguez (2008), pp. 93–96; Fernández Masia (2007), pp. 16–20; Orrego Vicuña (1972), p. 17; Vesel (2007), pp. 154–192. In the field of international law, this clause represents a controversial standard at the time of its application. The ICJ has had the opportunity to refer to it in some rulings. See: Anglo-Iranian Oil Company Case (1952) and Rights of U.S. Nationals in Morocco. (1952), p. 191.
- 37.
ILC (1970), p. 204.
- 38.
At its sixtieth session, where the Commission decided to include the topic “Most-favored-nation clause” in its work program and to establish a Study Group on the issue at its sixty-first session. A Study Group, co-chaired by Mr. Donald M. McRae and Mr. A. Rohan Perera, was established at the sixty-first session (2009). The Study Group was re-established at the sixty-second session (2010) under the same co-chairmanship. At its 3119th meeting, on 8 August 2011, the Committee took note of the oral report presented by the co-chairmen of the Study Group. (Official Records) para. 354. In 2010 and 2011, the Study Group decided to seek to further identify the normative content of MFN clauses in the investment field and to undertake further analysis of the jurisprudence, including the role of arbitrators, factors explaining different approaches to interpreting MFN provisions, divergences, and actions taken by States in response to the jurisprudence. The Group focused its studies on the working paper on the “interpretation and application of MFN clauses in investment agreements” prepared by Donald McRae. The working paper built on an earlier study on “The MFN Clause and the Maffezini Case, prepared by Rohan Perera, and sought to identify the factors that tribunals had taken into account in reaching their decisions to gauge whether this shed any light on the divergences in the case law, intending to identify categories of factors that had been alleged in the various cases and assessing their relative importance in the interpretation and application of MFN clauses.
- 39.
Argentina - Italy BIT. (1990).
- 40.
ICSID. Emilio Agustín Maffezini v. Kingdom of Spain, (2000). The investor, an Argentine national, had a dispute with the Government of Spain arising out of an investment he had made in Spanish territory with a subdivision of the State. The investor, to request access to ICSID jurisdiction under the Argentina-Spain BIT, invoked the application of the most favored nation (MFN) clause, which obliged Spain to grant treatment no less favorable than to investors from third states, because the Spain-Chile BIT allowed direct access to ICSID (prior negotiations of 6 months), while the Argentina-Spain BIT required prior recourse to the local courts of the host State for a period of not less than 18 months. See also ICSID Suez, Sociedad General de Aguas de Barcelona, S.A. and Vivendi Universal, S.A. v. Argentine Republic, (2010) as well as ICSID Suez, Sociedad General de Aguas de Barcelona S.A. and InterAguas Servicios Integrales del Agua S.A. v. Argentine Republic, (2010).
- 41.
ICSID. Emilio Agustín Maffezini v. Kingdom of Spain, (2000) para. 63–64.
- 42.
ICSID. Impregilo spA v. Argentine Republic. (2011) para. 108. In 1996 the Italian investor, together with other national partners, formed the company AGBA, with which it won a bid for water and sewage services in the Province of Buenos Aires. In 1999 the investor reached an agreement with the provincial government for 30 years for the exclusive collection, processing, and distribution of drinking water and sewage. This authorized the collection of a tariff and its continuous updating to cover service expenses. In 2001, given the difficulty in collecting the expected tariffs from users, the government was asked to modify the contractual conditions, which were rejected because this was part of the risks of an investment. With the 2001 economic crisis, the situation worsened and after several unsuccessful negotiations and reports of poor performance of the contract by the company, in 2006 the provincial government fined the company, and then the Governor ordered the cancellation of the contract and the transfer of the concession to a state-owned company (ABSA). In July 2007, the investor filed the case before ICSID.
- 43.
ICSID. Impregilio, Dissenting opinion of Prof. Brigitte Stern. Para. 47.
- 44.
Van Harten (2007).
- 45.
ICSID. Hochtief AG v. Argentine Republic. (2011) para. 66 and 68.
- 46.
Ibid, para. 86.
- 47.
The USA - Argentina BIT (Law 24.124), China - Argentina BIT (Law 24.325), among others.
- 48.
ICSID. El Paso Energy International Co v Argentine, (2006) para. 82. The investor is an energy company with U.S. nationality. It alleged before ICSID that, until 2003, it was the holder of indirect, non-controlling shareholdings in several Argentine entities: Compañías Asociadas Petroleras (CAPSA) and CAPEX SA (El Paso alleges that it held an indirect 45% interest in CAPSA, which, in turn, held 60.36% of the shares of CAPEX); Central Costanera SA (Costanera), in which El Paso claims to have acquired an indirect 12.335% interest; and Gasoducto del Pacífico SA (Costanera), in which El Paso claims to have acquired an indirect 12.335% interest; and Gasoducto del Pacífico SA (Pacifico), where it claimed to have indirect participation of about 13.4% (in preferred shares) and 11.8% (in common shares), respectively. It also argued that in April 1997, El Paso acquired, through another subsidiary (KLT Power Inc.), an indirect non-controlling interest of 12.335% in Costanera. Costanera, a local company engaged in the generation and sale of electricity, with a total capacity of 2311 megawatt-hours (MWh), is the largest thermal generation company in Argentina. It owns approximately 10% of the country’s total installed generation capacity, with a plant that has two state-of-the-art combined-cycle generators located in the city of Buenos Aires. In addition, in March 1998, it entered into an agreement with an Argentine branch of Bank of Boston for the lease of a gas processing plant located in the Agua de Cajón field in the Province of Neuquén. For its part, the State had rejected such a position, considering that the investor had not proved that it had such direct or indirect participation. The investor argued that in all these investments it had disbursed some US$ 300 million and that with the economic crisis of 2001 and the regulations issued by the government on tariff freezing and currency pesification, the investor’s assets and shares were indirectly expropriated, and that this constituted a violation of fair and equitable treatment and arbitrary treatment by the State. Although the tribunal did not consider that expropriation had been caused to the investor, it condemned the State for the violation of fair and equitable treatment, not recognizing the existence of the state of necessity adduced by the State as an exoneration of liability.
- 49.
See Gutiérrez Haces (2015), pp. 23–59.
- 50.
Panama-Argentine BIT. (Law 24.971).
- 51.
- 52.
CSJN. (1935) F145:307.
- 53.
ICSID. Repsol, S.A. and Repsol Butano, S.A. v. Argentine Republic (2012).
- 54.
Going back in time, these practices are not recent, so that the international tribunals on several occasions have had to analyze the scope of these measures. Thus, to mention a few, we can refer to the cases before the Permanent Court of International Justice, such as the German Interests in Upper Silesia, Norwegian Claims, or the Chorzow Factory case, in which it has been shown that a State may expropriate assets when it interferes with them, even if it manifests the absence of such intention. These cases, taken together, show that, even if a State does not intend to interfere with property rights, it may, by its acts, render them so useless that it will be understood to have expropriated them. Reference should also be made to the Oscar Chinn case of 1934, in which it was argued that a series of actions by the Belgian government in subsidizing transportation to the Congo for a company of which it was the majority shareholder had, by such state action, constituted an indirect expropriation of the British company which had hitherto carried on the business, reducing the value of the freight rates, thus making it unviable to continue the business. The court considered that the reduction in profits of the British company was due to the general economic situation and not to the measures adopted by the Belgian government, not accepting the arguments put forward by the United Kingdom that Belgium was responsible for Mr. Chinn’s losses. ICJ Case Oscar Chinn (1934) para. 88h. In these situations, already in the ICJ sphere, it is enough to recall the famous Barcelona Traction case of 1970 where circumstances of administrative and judicial measures that would have led to indirect expropriation were analyzed, although in the present case the Court held that, according to international custom, the shareholders of a foreign investment company were not entitled to claim for damages suffered by indirect expropriation and only the company could do so. See ICJ Case. Barcelona Traction Light and Power Company, Limited (1970), p. 3.
- 55.
The BIT with Germany refers to measures that the State may apply against the investor and that (…) in their effects are equivalent to expropriation or nationalization (art. 4); or in the case of the BIT with Italy, which expresses the limitations by which the investment “shall not be indirectly nationalized, expropriated or subjected to measures having equivalent effects (art. 5).
- 56.
López Escarena (2014).
- 57.
ICSID. Metalclad Corporation v. Mexico (1997). This case involved a dispute arising out of an investment made by the claimant Metalclad (Metalclad Corporation, a Delaware corporation) in the State of San Luis Potosí. Metalclad was the 100% shareholder of the shares representing the capital stock of Ecosistemas Nacionales, S. A. de C. V. (Econsa). (Econsa), which it acquired from Confinamiento Técnico de Residuos Industriales, S. A. de C. V. (Coterin) (a company with a shareholding of 100%). (Coterin) (a Mexican corporation) to develop and operate the hazardous waste facility at Valle de la Pedrera, located in Guadalcazar, San Luis Potosí. Coterin obtained permits to build and operate a hazardous waste landfill in La Pedrera, Guadalcazar. The municipality ordered the suspension of activities in the absence of a construction permit, as the municipality argued that such authority was within its jurisdiction and outside of the federal permits obtained. Metalclad, because of this, argued its disagreement, since after processing all the corresponding permits, the authorities assured it that the only permits required were the federal ones. However, when this happened, the federal environmental authorities told Metalclad that all it had to do was request the permit; that it was just a formality and it would be granted almost immediately. Following the above advice, Metalclad resumed construction by requesting a permit from the municipality. Shortly thereafter, it obtained an additional (federal) permit from the National Institute of Ecology for this purpose. On December 5, 1995, more than a year after the permit was requested and construction was almost completed, the municipal permit was formally denied. This denial was motivated by the fact that Metalclad had begun construction before obtaining the municipal construction permit. The Arbitral Tribunal held that the conduct of the Mexican officials towards Metalclad was in violation of NAFTA. ICSID Técnicas Medioambientales (Tecmed) vs. México (2003) para 116.
- 58.
ICSID. CMS Gas Transmission Company v. Argentine. (2005) para 262.
- 59.
It had its first glimpses in 1922 when the Supreme Court of the United States established in the case Pennsylvania Coal Co. vs Mahon (1922) that, if a state regulation “goes too far”, it may constitute an expropriation of private property that must be compensated. However, the validity of this position is relative, since later with the so-called New Deal legal process, the American courts practically abandoned these positions, leaving to the discretion of local legislatures the decision to compensate or not, although the Supreme Court in later cases alluded to these positions in cases such as Nollan vs California Coastal Commission (1987) and Lucas vs South Carolina Coastal Council (1992).
- 60.
ICSID, Teinver S.A., Transportes de Cercanías S.A. and Autobuses Urbanos del Sur S.A. v. Argentine Republic. (2009).
- 61.
Ibíd., para. 937.
- 62.
Ibid, para. 941.
- 63.
ICSID. Orazul International Spain Holdings S.L. v. Argentine Republic (2019).
- 64.
- 65.
Simma and Kill (2009), pp. 29–30.
- 66.
ICSID. Urbaser S.A. and Consorcio de Aguas Bilbao Bizkaia, Bilbao Biskaia Ur Partzuergoa v. The Argentine Republic (2007).
- 67.
- 68.
ICSID. Urbaser. para 1195–99.
- 69.
ICSID. MetLife, Inc., MetLife Servicios S.A. and MetLife Seguros de Retiro S.A. v. Argentine Republic. (2017).
- 70.
CELS (2021).
- 71.
ICSID. Nationale-Nederlanden Holdinvest B.V. and others v. Argentine Republic (2019).
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Authors and Affiliations
Editor information
Editors and Affiliations
Appendices
Norms
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MERCOSUR/CMC/DEC/11/93. Signed on January 17, 1994.
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MERCOSUR/CMC/DEC N° 11/94. Approved on August 5, 1994.
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MERCOSUR/CMC/DEC. N° 30/10. Signed on December 16, 2010.
ICSID Awards
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ICSID. Metalclad Corporation v. Mexico (1997). (n° ARB(AF) 97/1).
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ICSID. Emilio Agustín Maffezini v. Kingdom of Spain, (2000). (n°. ARB/97/7).
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ICSID. CMS Gas Transmission vs Argentine Republic (2001). (n° ARB/01/08).
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ICSID. Enron Corporation Ponderosa Assets LP vs Argentine (2001). (n° ARB/01/3).
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ICSID. Azurix Corporation vs. Argentine (2001). ( n° ARB01/12).
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ICSID. LG&E Energy Corporation vs Argentine (2002). (n° ARB/02/01).
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ICSID. Sempra Energy International v. Argentine. (2002). (n° ARB/02/16).
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ICSID. Siemens AG vs. Argentine (2002). ( n° ARB/02/08).
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ICSID. Compañía de Aguas del Aconquija SA and Vivendi SA v. Argentine (2003). (n° ARB/97/3).
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ICSID. Continental Casualty Company vs. Argentine. (2003). (n° ARB/03/9).
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ICSID Técnicas Medioambientales (Tecmed) vs. México (2003) (n° ARB/AF) /00/2).
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ICSID. TSA Spectrum de Argentina SA vs. Argentine. (2005). (n° ARB/05/5).
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ICSID. CMS Gas Transmission Company vs. Argentine Republic. (2005) para 262.
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ICSID. El Paso Energy International Co vs Argentine Republic, (2006) (n° ARB/03/15).
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ICSID. Urbaser S.A. and Consorcio de Aguas Bilbao Bizkaia, Bilbao Biskaia Ur Partzuergoa vs. The Argentine Republic (2007). (n°. ARB/07/26).
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ICSID, Teinver S.A., Transportes de Cercanías S.A. and Autobuses Urbanos del Sur S.A. vs. Argentine Republic. (2009). (n°. ARB/09/1).
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ICSID Suez, Sociedad General de Aguas de Barcelona, S.A. and Vivendi Universal, S.A. vs. Argentine Republic, (2010). (n°. ARB/03/19).
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ICSID Suez, Sociedad General de Aguas de Barcelona S.A. and InterAguas Servicios Integrales del Agua S.A. vs. Argentine Republic, (2010). (n° ARB/03/17).
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ICSID. Impregilo spA v. Argentine Republic. (2011). (n° ARB/07/17).
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ICSID. Hochtief AG v. Argentine Republic. (2011) (n° ARB/07/31).
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ICSID. Repsol, S.A. and Repsol Butano, S.A. v. Argentine Republic (2012). (n°. ARB/12/38).
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ICSID. MetLife, Inc., MetLife Servicios S.A. and MetLife Seguros de Retiro S.A. v. Argentine Republic. (2017). (n°. ARB/17/17).
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ICSID. Orazul International Spain Holdings S.L. v. Argentine Republic (2019). (n° ARB/19/25).
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ICSID. Nationale-Nederlanden Holdinvest B.V. and others v. Argentine Republic (2019). (n° ARB/19/11).
List of All Arbitration Awards on Argentina
ICPJ
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ICJ Case Oscar Chinn (1934) United Kingdom vs. Belgium, ser A/B, No. 63. Par. 88h.
ICJ
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Anglo-Iranian Oil Company Case (1952). United Kingdom vs. Iran, Sentence, July, 22, (Recueil, 1952, p. 2018.
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Rights of U.S. Nationals in Morocco. (1952). France vs. United States of America. Sentence, August, 27 (Recueil, 1952, p. 191.
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Barcelona Traction Light and Power Company, Limited (1970), Belgium vs. Kingdom of Spain), ICJ Report, 1970, p. 3.
CSJN
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CSJN. (1935) F145:307. “Pedro Emilio Bourdieu v. Municipalidad de la Capital”.
SCUSA
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Pennsylvania Coal Co. vs Mahon (1922). 260 US 393.
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Nollan vs California Coastal Commission (1987). 483 US 825.
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Lucas vs South Carolina Coastal Council (1992). 505 US 1003.
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Sommer, C.G. (2024). International Investment Law and Its Scope in Argentina. In: Monebhurrun, N., Olarte-Bácares, C., Velásquez-Ruiz, M.A. (eds) International Investment Law and Arbitration from a Latin American Perspective. International Law and the Global South. Springer, Cham. https://doi.org/10.1007/978-3-031-49382-9_4
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