May 22, 2024

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Argentina lost a million-dollar case at the International Court of Justice for AFJP nationalization

Argentina lost a million-dollar case at the International Court of Justice for AFJP nationalization
AFJP Getty Images Argentina loses million-dollar lawsuit at international court over nationalization

The divisiveness of past results does not end in Argentina. The Argentine government lost an arbitration case against an international company for nationalizing a pension fund during Argentina's government. Christina Kirchner.

The case was implemented by the World Bank arbitral tribunal after the MetLife case for nationalization of one of the pension and pension fund managers (AFJP).

Corroborated by competent sources relevant to the case Infobay The World Bank-affiliated body is the news of a case that ended with a ruling this week.

Because of the difficult task of proving specific damages caused by that political decision, the compensation awarded was much lower than MetLife originally claimed.

The first case in 2017 was based on violations of the 1991 United States Investment Protection Agreement (BIT) with Argentina, which decided to expropriate the AFJP when the fiscal surplus fell early in the presidency. Christina Kirchner. This agreement was enacted in 1992 by Congress Act no. 24,124 approved by s.

Although Kirchnerism encouraged a consultation in society, it culminated in a clear rejection of the possibility of re-nationalizing the pension system, which then followed this route to temporarily postpone the red appearance of the public accounts. During the president's second term, this fiscal deficit trend was consolidated, with rising inflation and a corresponding increase in poverty, despite brutal increases in public spending.

The 54th case the country received from files derived from the results of the 2001 crisis and others due to actions taken during Kirchnerism was submitted to the International Center for Settlement of Investment Disputes (ICSID) under the World Bank.

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The firm was advised on sovereign debt disputes by an Argentina-based firm, White & Case LLP, while the Treasury Attorney General's Office was assisted by Curtis, Mallet-Prevost, Gould & Moseley in the United States and Argentina. .

Amato Boudo was one of the promoters of AFJP nationalization in Christina Kirchner's government

MetLife, which has been operating in Argentina since 1994, chose to file the lawsuit only when it sells life and savings, property and casualty insurance. Maurizio Macri was in rule because there was no statute of limitations for this type of suit.

The tribunal, chaired by Ian Binnie (Canada) and Klaus Reichert (Germany) Campbell Allen MC Lachlan (New Zealand) as arbitrators, delivered its verdict on April 5 this year.
According to an article Lisa Bomer From IAReporter, a year after awarding this powerful institution, the ICSID court rejected Argentina's request not to deal with the case; The article recalled that although the two plaintiffs had initially filed with a third company (MetLife Pension Insurance), in 2020, the court took note of the interference of the procedure related to that company.

“The virtual hearing on jurisdiction and qualifications was held in May 2021. This led to an (unpublished) decision on jurisdiction, liability, quantum principles and interests on September 26, 2022, in which – IAReporter has learned – the tribunal upheld the jurisdictional finding that Argentina violated the BIT and concluded that the state should pay compensation. Plaintiffs to the extent of the fair market value of the expropriated MetLife business.”

Later, he noted, “Plaintiffs filed a motion for clarification and amendment regarding certain quantum issues, which the court ruled on June 30, 2023.”

Argentine cases before ICSID

“IAReporter has confirmed that the decision awarded plaintiffs approximately $6.8 million in damages, plus $1.5 million in prejudgment interest, representing only a small portion of MetLife's claimed damages,” he said.

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In fact, sources close to the dispute indicated that the lawsuit was “in the hundreds of millions of dollars.”

Bohmer recalls, “Argentina argued that the tribunal lacked jurisdiction: the claim was prescribed because of the endangered species principle; the three original claimants did not qualify as protected investors by the BIT; there was no prima facie breach of the BIT; the claims should have been submitted to Argentine courts; and certain issues should have been excluded at the potential stage of qualification.” .”

These demands were not heard, although at least the Argentine state received a much smaller sentence than originally requested.

In terms of its cases, both concluded and pending, Argentina remains the most requested country at ICSID, followed by Venezuela with 49. It is followed by a group of countries including Spain, Egypt, Peru and Mexico and another, more backward and tighter, made up of Hungary, Ecuador, Kazakhstan and Croatia. For Argentina, the bad pedigree will never end.