Buenos Aires Herald | 2 August 2010
The country had been condemned to pay US$106 million
ICSID cancels another sentence against Argentina
A committee of the International Centre for Settlement of Investment Disputes (ICSID) ruled in favour of Argentina and cancelled a decision by which it had been condemned to pay more than US$106 million to shareholding companies of the local Southern Gas Conveyor (TGS), a news source said.
The complaint, issued by the US company Enron Creditors Recovery and Ponderosa Assets, found support in the Argentine government’s refusal to allow a tariff adjustment of gas transport in dollars and for the pesification of the rates created in 2002.
Argentina, through the nation’s Treasury Solicitor’s Office, invoked as a defence the existence of a state of need -an exception contemplated by the Bilateral Investment Treaty (TBI)-, which had led to the sanction of the Emergency Law and the abandonment of the convertibility regime in order to confront a political, economic, and social crisis.
After Argentina devalued its currency eight years ago and converted to pesos its contracts, many private concessionary companies of public services that had rates in dollars filed complaints against the South American country.
TGS transports 60 percent of gas consumed in Argentina.
The conveyor is mainly controlled by the Energy Investments Company (CIESA), with 55.3 percent of ordinary company shares, and Petrobras Engery (PESA) as its main shareholder. PESA is involved in the operations of TGS, since it has a three-year contract to provide technical support until 2011.
The remaining 50 percent of CIESA is distributed between affiliates of Enron Corp., with 10 percent, and a trust administered by ABN Amro Bank NV, with 40 percent. The TGS shares in the Buenos Aires Stock Market closed on Thursday, last day they had business, at $2.93.
ICSID also ruled in favour of the Latin American country a few weeks ago after a complaint filed by Sempra Energy company, in which the country had been condemned to pay US$128 million, plus interest.