Salini Impregilo S.p.A. v. Argentine Republic

Case summary

At a glance

Parties: Webuild S.p.A. (formerly Salini Impregilo S.p.A.) (Italy) v. the Argentine Republic
Case no.: ICSID Case No. ARB/15/39
Forum and rules: ICSID Convention arbitration; ICSID Arbitration Rules of 2006; place of proceeding Washington, D.C.
Treaty: Argentina–Italy BIT, signed 22 May 1990, in force 14 October 1993
Tribunal: Judge James R. Crawford (President until his death on 31 May 2021), then Ms. Lucinda A. Low (President from 15 July 2021); Prof. Kaj Hobér; Prof. Jürgen Kurtz
Sector: Transport infrastructure; Rosario–Victoria bridge and toll road concession
Outcome: Claim upheld in part (Award, 28 April 2025): Argentina breached fair and equitable treatment by failing to restore the concession's economic equilibrium after the 2002 emergency; the expropriation and discrimination claims were not decided, the necessity defence was rejected, and the claimant bears a 20% share of responsibility.
Amount: Claimed: USD 219.9 million in the Memorial, revised to USD 174.2 million in the Reply (income approach). Awarded: USD 97,400,000.00 as of August 2014 (USD 147,031,036.74 with interest), corrected on rectification to USD 77,900,000.00 (USD 117,624,829.39 with interest). Interest: 12-month LIBOR on historical losses, then 4% pre-award and 6% post-award, compounded annually. Costs: Argentina pays USD 5,675,488.52 towards the claimant's costs; the costs of the arbitration (USD 1,587,454.50) are shared equally.

The dispute

Salini Impregilo (now Webuild), an Italian construction group, held 26% of Puentes del Litoral S.A., the Argentine company that held a 25-year concession signed in 1998 to build and operate a road and bridge link between Rosario and Victoria. The concession was subsidised by the State. Argentina's Emergency Law of 6 January 2002 converted dollar tolls into pesos and ordered the renegotiation of public contracts. Two letters of understanding and four transitory agreements were signed between 2006 and 2012, but none was put into effect. Puentes became insolvent and resolved to dissolve, and Argentina terminated the concession in August 2014. Webuild claimed breaches of fair and equitable treatment, non-discrimination (including via the MFN clause) and expropriation. Argentina raised extinctive prescription, the BIT's 18-month local litigation requirement, forum non conveniens and lack of standing, blamed Puentes' failure to obtain financing for its collapse, and invoked necessity.

Key holdings

Jurisdiction and admissibility upheld. Extinctive prescription goes to admissibility, not jurisdiction. The delay was not unreasonable, given the renegotiation process, Decree 1090/2002 and the 2007 notice of the treaty claim. Argentine limitation periods do not apply to the treaty claims. Decision on Jurisdiction ¶¶ 82–94
The 18-month local proceedings requirement in Article 8(2)–(3) was met by Puentes' administrative complaint of 11 June 2013, which concerned the same substantive dispute. Article 8(4) imposes only a best-efforts duty, so the claimant, a minority shareholder, was not required to withdraw Puentes' court case. Forum non conveniens was rejected, and the claimant has standing as holder of 26% of Puentes' shares. Decision on Jurisdiction ¶¶ 133–140, 148, 173, 186
Argentina breached Article 2.2 (first and second sentences) of the BIT by failing, by September 2006 and after the economic emergency had ended, to restore the concession's economic equilibrium as the Concession Contract and the Emergency Law required. The necessity defence fails because the crisis had largely passed when the breach occurred. The expropriation and discrimination claims were not decided, because they would not increase the damages. Decision on Liability ¶¶ 335–337, 354, 438
Damages follow the Chorzów Factory full reparation standard. They are calculated with a DCF method on free cash flow to the firm, using the 2006 letter of understanding toll rates, with historical losses from September 2006 to the valuation date of 31 August 2014 and future losses to the end of the concession. The 2001 financing failure did not cause Puentes' collapse; the prolonged freeze of toll rates did. Argentina is nevertheless not liable for 100% of the loss. Decision on Liability ¶¶ 360–368, 380–382
Argentina's request to reconsider the Decision on Liability in light of the Argentine court judgment of 27 June 2024, which dismissed Puentes' contract claims, was denied. That judgment applied Argentine law to a different cause of action brought by a different party, and is not a decisive legal authority for applying the BIT. Argentina must pay the claimant's costs of responding to the request. Decision on Reconsideration ¶¶ 76–92
The claimant bears a 20% share of responsibility, reflecting the debt overhang from the construction phase and slower repayment of subcontractor debt. Historical losses carry 12-month LIBOR interest, and future losses are discounted at a WACC of 8.9%. Interest runs at 4% from the valuation date to the Award and at 6% thereafter, compounded annually. Award ¶¶ 141, 147, 151, 166–167
On rectification, the Tribunal corrected a mistranslation in the Award: "claims" should read "total debts". It refused to lower the 20% share, which rested on all the evidence. It held that the damages table had omitted the 20% deduction and corrected the principal to USD 77,900,000.00 and the total with interest to USD 117,624,829.39. The costs of the rectification stage are shared equally. Decision on Rectification ¶¶ 44–50, 57
Costs: Argentina pays USD 233,282.50 for the reconsideration phase, 50% of the claimant's other legal fees and expenses (USD 5,366,708.75) and USD 75,497.26 to equalise the advances to ICSID. The costs of the arbitration are shared equally. Award ¶¶ 182–186

Procedural history

1 September 2015Request for Arbitration filed. ICSID registered it on 17 September 2015.
11 July 2016Tribunal constituted: Crawford (President), Hobér and Kurtz.
23 February 2018Decision on Jurisdiction and Admissibility: all of Argentina's objections are rejected.
2 and 11–19 February 2021Hearing on the merits held by video conference.
31 May 2021Judge Crawford died. Lucinda A. Low was appointed President and the Tribunal was reconstituted on 15 July 2021.
3 March 2023Decision on Liability and Directions on Quantum: breach of fair and equitable treatment found; the necessity defence is denied.
25 September 2024Decision denying Argentina's request for reconsideration based on the Argentine court judgment of 27 June 2024.
28 April 2025Award: USD 97.4 million plus interest, and costs.
23 September 2025Decision on Rectification: the 20% deduction is applied and the principal is reduced to USD 77,900,000.00; the claimant's request to lower the 20% share is denied.

Tribunal, counsel and experts

Decided by: James Crawford President — chosen by the co-arbitrators (died 31 May 2021; replaced by Lucinda A. Low)
Lucinda A. Low President — chosen by the co-arbitrators (replaced James R. Crawford; Tribunal reconstituted 15 July 2021)
Kaj Hobér Co-arbitrator — appointed by the claimant
Jürgen Kurtz Co-arbitrator — appointed by the respondent
For the claimant: King & Spalding LLP · Marval, O'Farrell & Mairal
For the respondent: Procuración del Tesoro de la Nación
Experts: Compass Lexecon (claimant) · Daniela Bambaci (claimant) · Santiago Dellepiane (claimant) · Horacio Liendo (claimant) · Melani Machinea (respondent) · Ernesto Schargrodsky (respondent) · Julio Pablo Comadira (respondent) · Pablo Gerchunoff (respondent)