Impregilo S.p.A. v. Argentine Republic

At a glance

Parties

Impregilo S.p.A. (Italy; later Webuild S.p.A.) v. the Argentine Republic

Case no.

ICSID Case No. ARB/07/17; enforcement: Webuild S.p.A. v. Argentine Republic, Civil Action No. 21-2464 (RBW) (D.D.C.)

Forum and rules

ICSID Convention arbitration; ICSID Arbitration Rules (2006 Rules in the annulment proceeding)

Treaty

Argentina–Italy BIT (signed 22 May 1990, in force 14 October 1993), with the Argentina–US BIT invoked through the MFN clause

Tribunal

Judge Hans Danelius (President), Judge Charles N. Brower, Professor Brigitte Stern

Sector

Water and sewage services concession, Province of Buenos Aires

Outcome

Partial win for the claimant (21 June 2011): jurisdiction upheld by majority through the MFN clause; no expropriation (majority); breach of fair and equitable treatment (unanimous). Annulment application dismissed (24 January 2014). Award confirmed and enforced by the US District Court for the District of Columbia (4 April 2025).

Amount

Claimed: the claimant's experts valued the investment at USD 87,156,098 as of July 2006, and USD 119,362,503 as of October 2008 with 15% interest. Awarded: USD 21,294,000 (Impregilo's capital contribution), plus interest at 6% compounded annually from 11 July 2006. Costs: each party bears its own costs and half of ICSID's and the Tribunal's fees and expenses. In the annulment, Argentina bore the Committee's fees and ICSID's costs; each side bore its own legal costs.

The dispute

Impregilo, an Italian company, led a consortium that was awarded a water and sewage concession in the Province of Buenos Aires. The consortium formed the Argentine company AGBA, which signed a 30-year Concession Contract with the Province on 7 December 1999. AGBA struggled from the start with low bill collection and with obtaining financing. In 2002 the emergency legislation (Law No. 25,561) pesified its dollar tariffs at parity and froze them, and in 2003 a New Regulatory Framework (Decree No. 878/03) was imposed. Repeated requests to renegotiate the contract failed, and on 11 July 2006 the Province terminated the concession for AGBA's fault (Decree No. 1666/06) and transferred it to the state-owned ABSA. Impregilo claimed expropriation, breach of fair and equitable treatment and other breaches of the Argentina–Italy BIT. Argentina objected that Impregilo had not litigated for 18 months in local courts, that the claims were indirect shareholder claims, and that they were contractual; it also pleaded necessity and Article 4 of the BIT.

Key holdings

1. Article 8(3) of the Argentina–Italy BIT sets a mandatory jurisdictional condition: the investor must first litigate in the local courts for 18 months. Impregilo did not comply with it. Award ¶¶ 90–94
2. By majority, the MFN clause in Article 3(1), which covers "all other matters regulated by this Agreement", allowed Impregilo to rely on the dispute settlement rules of the Argentina–US BIT, so the case could not be dismissed for failure to meet Article 8(2)–(3). Brigitte Stern dissented: an MFN clause cannot change the conditions of a State's consent to arbitration, so the Tribunal lacked jurisdiction. Award ¶ 108; Stern opinion ¶¶ 78–109
3. No expropriation (majority). The Province, with some justification, considered that AGBA had grossly failed to meet its contractual obligations and terminated the contract on that basis. This excluded direct, indirect or creeping expropriation. Charles Brower dissented: he found the termination a politically predetermined decision that amounted to expropriation. Award ¶ 283; Brower opinion ¶¶ 17–34
4. Breach of fair and equitable treatment (unanimous). Most of the Province's contractual conduct did not engage the BIT. But Argentina failed to restore a reasonable equilibrium in the concession after pesification and the New Regulatory Framework, and this breached Article 2(2). Award ¶¶ 325–331
5. Article 4 of the BIT gives investors national and MFN treatment for losses in an emergency; it does not create an exception to the State's obligations. The necessity defence under customary law (ILC Article 25) fails because Argentina contributed substantially to the crisis. This was a majority finding; Stern doubted Argentina's contribution was proven but concurred in the result because the breach continued after the crisis. Award ¶¶ 339–343, 358–360
6. Damages (majority). Responsibility for the concession's failure was shared, and profitability was not shown, so the Tribunal rejected both the income-based and the asset-based valuation methods. It awarded Impregilo its capital contribution of USD 21,294,000, with interest at 6% compounded annually from 11 July 2006. Each party bears its own costs. Award ¶¶ 375–385
7. Annulment refused. Applying an MFN clause to jurisdiction, where the treaty neither prohibits nor authorises it, can never by itself be a manifest excess of powers. The Committee rejected all other grounds as disagreement with the Tribunal's reasoning. Annulment Decision ¶¶ 140–141, 222

Procedural history

1. 25 July 2007ICSID registers Impregilo's Request for Arbitration.
2. 27 May 2008Tribunal constituted.
3. 4–6 May 2009Hearing on jurisdiction in Washington, D.C.
4. 9–18 March 2010Hearing on the merits in Paris.
5. 21 June 2011Award: breach of fair and equitable treatment, USD 21,294,000 plus interest. Separate concurring and dissenting opinions by Brigitte Stern and Charles N. Brower.
6. 19 October 2011Argentina applies for annulment and a stay of enforcement. ICSID registers the application on 25 October 2011 and grants a provisional stay.
7. 24 January 2014The ad hoc Committee unanimously dismisses the annulment application and the stay terminates.
8. 20 September 2021Webuild S.p.A. (formerly Impregilo) sues in the US District Court for the District of Columbia to enforce the Award.
9. 19 November 2024The court denies Argentina's motion to dismiss: the 12-year limitations period of D.C. Code § 15-101(a) applies, so the action is timely.
10. 4 April 2025The court grants judgment on the pleadings, confirms the Award, and enters judgment for USD 21,294,000 plus 6% compound interest from 11 July 2006, and post-judgment interest.

Tribunal, counsel and experts

Decided by

• Hans Danelius President — appointed by the institution
• Charles N. Brower Co-arbitrator — appointed by the claimant (dissented on expropriation, valuation and interest)
• Brigitte Stern Co-arbitrator — appointed by the respondent (dissented on jurisdiction (MFN clause))
• Rodrigo Oreamuno Committee president
• Eduardo Zuleta Committee member
• Teresa Cheng Committee member
• Reggie B. Walton Judge, US District Court for the District of Columbia

For the claimant

King & Spalding LLP · Impregilo S.p.A.

For the respondent

Procuración del Tesoro de la Nación

Experts

Richard E. Walck (claimant) · Leonardo Giacchino (claimant) · José Pablo Dapena (respondent) · Germán Coloma (respondent) · Sebastian Edwards (claimant)

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Keywords

• most-favoured-nation clause
• MFN and dispute settlement
• 18-month local litigation requirement
• Argentina–Italy BIT
• Argentina–US BIT
• fair and equitable treatment
• indirect expropriation
• creeping expropriation
• shareholder claims
• state of necessity
• Argentine economic crisis
• pesification
• water and sewage concession
• AGBA
• contract vs treaty claims
• annulment
• enforcement
• statute of limitations

Summary generated with AI from the published documents — refer to the award for the authoritative text.