Argentina to appeal court ruling ordering it to pay millions to Casinos Austria | 27 April 2022

Argentina to appeal court ruling ordering it to pay millions to Casinos Austria

by Erik Gibbs

Casinos Austria is receiving millions of dollars from Argentina over a dispute that led to the cancellation of its license in the country. An international tribunal upheld the payment plan last November, but Argentina is going to appeal the ruling.

Almost a decade after a battle between Casinos Austria and the Argentinian province of Salta began, it still simmers. The province revoked the casino operator’s license in 2013, allegedly without merit, and Casinos Austria demanded justice.

After years of dispute, the International Centre for Settlement of Investment Disputes (ICSID) ruled last November that the province of Salta must pay an eight-figure sum as compensation. Argentina has only now decided to appeal the decision.

Casinos Austria Wants Justice

The original lawsuit began when Salta, through the Gaming Regulatory Body (ENREJA), revoked the license of Enjasa. The Casinos Austria firm launched in 1999, and the license, at the time, was valid until 2030.

Salta abruptly canceled the operator’s license amid of alleged violations of anti-money laundering (AML) laws. The accusations came directly from the provincial government, but no proof ever emerged. As a result, Casinos Austria sued.

The operator, which will be part of Japan’s integrated resort industry, based its claim on the Bilateral Investment Protection Agreement between the Republic of Austria and Argentina. The international award from ICSID came after Casinos Austria tried, unsuccessfully, to find a resolution in courts in Argentina.

In issuing its ruling, ICSID determined that the termination of Enjasa was an “abusive and arbitrary” act of the government. It added that the operator suffered an “illegal expropriation,” although ICSID needed over 200 pages to explain how the government failed.

Casinos Austria asked for compensation of $63 million, while Argentina argued that it should be $7 million. The court set an intermediate amount between the two claims. The ruling obliges Salta to pay $36 million to Casinos Austria for the premature interruption of the concession.

Argentina Wants Financial Relief

Last year, the international tribunal included Hans Van Houtte from Belgium, Stephan Schill from Germany, and Santiago Torres Bernárdez from Spain. After announcing the decision, they also drafted the compensation, which they delivered on November 5.

The Attorney General’s Office of the Treasury of Argentina finally appealed that decision last month. It came in just under the wire. ICSID had given it 120 days from the presentation of the ruling to launch an appeal.

The amount Salta has to pay is roughly two months worth of its entire tax revenue, according to a government statement. Juan Manuel Urtubey, the former governor of the province, asserts that the amount is out of line with what the company could have made if it had continued to operate.

As a result, the General Secretariat of ICSID has now suspended its previous ruling. The next course of action depends on the direction the appeal takes.