By Lawrence Hurley
WASHINGTON, June 10 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
The case is BG Group v. Argentina, U.S. Supreme Court, No.