BUENOS AIRES Dec 21 The World Bank's
arbitration body started moving ahead this week on a complaint
by Spanish oil major Repsol over Argentina's expropriation of
its controlling stake in energy company YPF.
Two weeks after Repsol filed the complaint, the
International Center for Settlement of Investment Disputes
agreed on Dec. 18 to begin the arbitration process, according to
the organization's web site.
The case could end up being the biggest one against
Argentina, which racked up dozens of complaints at the ICSID
after a currency devaluation affected private contracts during
the country's economic crisis in 2001-02.
In the case of Repsol, Argentine President Cristina
Fernandez nationalized YPF , the country's
biggest energy company, in May, accusing Repsol of
slack investment to boost output at a time of growing demand.
Repsol, which has denied underinvesting in YPF, called the
move unlawful, discriminatory and a violation of a bilateral
investment treaty between Spain and Argentina.
Repsol says the 51 percent stake is worth $10 billion, but
Argentine government officials have indicated they think it is
worth significantly less. The Planning Ministry has formed a
committee to determine the value for compensation purposes.
The ICSID told Repsol and the Argentine government that they
had 30 days to name one arbitrator each to a three-member panel
that will oversee the case. The third member of the panel must
be agreed by both sides.
No one from the Argentine government was immediately
available to comment on the ICSID's move.
Legal specialists have said it could take more than a year
to complete the ICSID arbitration process, which deepens legal
wrangling over the nationalization.
Repsol also sued Argentina in May through a U.S. court and
has threatened legal action against companies that invest in
Earlier this month, Repsol filed a U.S. lawsuit to block
Chevron Corp's plan to invest in a large shale deposit
in Argentina with YPF.
In March, U.S. President Barack Obama said he would suspend
trade benefits for Argentina because it had failed to pay more
than $300 million in compensation awards in two disputes handled