Argentina Describes Ruling in Favor of Suez as “Defeat” for French Company
Despite seeing an international arbitration board award French utility Suez $405 million in damages, Argentina is describing the ruling as a defeat for Suez and a victory for themselves. However, despite this rhetoric, Argentina also announced intentions to appeal the ruling.
The ruling came from the International Center for Settlement of Investment Disputes (ICSID) in Washington, D.C. Suez had sought $1.2 billion in damages, so it is possible to describe the award of $405 million as a disappointment or defeat. The dispute stems from the termination of a contract between Argentina and Suez, and Suez’s claim that they lost not just actual capital investments of about $400 million but also moral damages.
However, the ICSID rejected the argument for moral damages and only sustained the actual financial losses claimed. Argentina regards this as a victory as it implicitly supports their right to terminate the contract and only recognizes the company’s right to recover its lost investments in the country. However, Argentina also disputes the amount claimed as a loss by Suez, claiming that the actual amount of money invested in the project was much smaller.
Suez had a concession from Argentina to bring potable water to and improve drainage services in Buenos Aires, awarded in 1993. Argentina claims the project was never administered properly and canceled the contract in 2006 amid protests from Suez. The two have been locked in litigation and arbitration ever since, and with the appeal will likely remain so for a long time.