WASHINGTON The U.S. Supreme Court agreed on Monday to hear British company BG Group Plc's appeal over a $185.3 million arbitration award it won against Argentina that an appeals court later threw out.
A U.S. district court ruled in 2011 that BG, a natural gas exploration and distribution company, should recover the money because a decision by the Argentine government in 2002 to freeze gas prices breached a 1993 treaty between Britain and Argentina.
This treaty was designed to encourage investment by foreign companies such as Reading-based BG.
Argentina imposed the price freeze shortly after it announced a sovereign debt default of roughly $100 billion at the end of 2001.
BG challenged the freeze, saying it reduced the value of its roughly 45 percent stake in Argentina's Metrogas SA. A BG spokesman said the company sold its stake in Metrogas earlier this year to YPF SA and Integra Gas Distribution LLC.
An arbitration panel in Washington, D.C., called the International Chamber of Commerce International Court of Arbitration, concluded in 2007 that because Argentina had by emergency decree restricted access to its courts, it would create an "absurd and unreasonable result" to read the treaty literally and require BG to go through the courts first.
But a federal appeals court in Washington, D.C., said in January 2012 that BG should have first tried to sue in Argentina and then wait 18 months for a ruling, as required by the treaty, before resorting to arbitration.
Oral arguments and a decision in the case are due in the court's next term, which starts in October and ends in June 2014.
The case is BG Group v. Argentina, U.S. Supreme Court, No. 12-138.
(Reporting by Lawrence Hurley; Editing by Howard Goller, Gerald E. McCormick, W Simon and Andre Grenon)