Shearman & Sterling secured a final award on May 22, 2014 in an ICSID arbitration brought by French water and sewerage company SAUR International against the Argentine Republic in November 2003. The Tribunal ordered the State to pay SAUR US$39.99 million plus 6% interest compounded annually since September 2007. The Tribunal also entered a significant costs award in favor of the Claimant.
The dispute concerns SAUR’s investment in Obras Sanitarias de Mendoza (“OSM”), the water and sewerage concessionaire of the Province of Mendoza. SAUR brought its claim against the Argentine Republic before ICSID in the aftermath of the 2001-2002 Argentinean economic crisis, after the provincial authorities failed to implement service tariff increases agreed upon with OSM, including under an agreement negotiated between the concessionaire and the Province of Mendoza. The claim was brought under the France-Argentina bilateral investment treaty.
The Tribunal upheld its jurisdiction over the matter in 2006. In a subsequent decision on jurisdiction and liability, rendered in June 2012, the Tribunal held that Argentina had expropriated SAUR’s investment without compensation and violated the fair and equitable treatment standard under the France-Argentina bilateral investment treaty. In the award rendered on May 22, 2014, the Tribunal held that Argentina was liable for the Province of Mendoza’s failure to implement the service tariff increases agreed upon with OSM, and for the Province authorities’ decision to place the concession under administrative control on the basis of OSM and SAUR’s various alleged deficiencies before terminating the concession and renationalizing the service in 2010.
“We are delighted to see this saga, which we started in November 2003, concluded to the full satisfaction of our client,” says Emmanuel Gaillard, head of Shearman & Sterling’s Global International Arbitration Group.
The Shearman & Sterling team representing SAUR International in the arbitration included partners Emmanuel Gaillard (Paris-International Arbitration), Yas Banifatemi (Paris-International Arbitration and Public International Law) and Coralie Darrigade (Paris-International Arbitration) and associates Ximena Herrera (London-International Arbitration) and Thomas Parigot (New York-International Arbitration).