|
 On a 7-2 vote, the high court said the federal appeals court in
Washington, D.C., should not have thrown out the award. Argentina
had argued the case should have been litigated in its courts first
before it could go to arbitration.
The dispute concerned whether BG should recover the money on the
grounds that a decision by the Argentine government during its 2001
economic crisis to freeze gas prices breached a 1993 treaty between
Britain and Argentina. Both BG, via its lawyer, and Argentina
declined to comment on the ruling.
In the majority opinion, Justice Stephen Breyer said a decision on
whether the dispute was subject to arbitration was up to
arbitrators.
"In our view, the matter is for the arbitrators, and courts must
review their determinations with deference," he wrote.
Chief Justice John Roberts, joined by Justice Anthony Kennedy, wrote
a dissenting opinion saying that the investment treaty called for
disputes to go to arbitration only if both parties agreed to it.
The treaty was meant to encourage investment by foreign companies
such as Reading, England-based BG. Argentina imposed the price
freeze shortly after it announced in December 2001 a sovereign debt
default of roughly $100 billion.
BG challenged the freeze, saying it reduced the value of its roughly
45 percent stake in Argentina's Metrogas SA. BG sold its stake in
Metrogas earlier this year to YPF SA and Integra Gas Distribution
LLC.
The International Chamber of Commerce International Court of
Arbitration, based in Washington, D.C., concluded in 2007 that
because Argentina had by emergency decree restricted access to its
courts, BG could go straight to arbitration.
[to top of second column] |
A federal district court judge in Washington upheld the award in a
2011 decision. But the federal appeals court ruled for Argentina a
year later, saying that BG should have first tried to sue in
Argentina.
The U.S. Supreme Court already has agreed to hear another case
prompted by Argentina's economic problems in the early 2000s. On
January 10 the court said it would consider a dispute over subpoenas
in a case stemming from long-running litigation over Argentina's
obligations to bond investors in the wake of its default on
sovereign debt. In a separate case, which the high court has yet to
decide whether to hear, Argentina is seeking to reverse lower court
decisions ordering the country to pay $1.33 billion to the
bondholders.
The case decided on Wednesday is BG Group v. Argentina, U.S. Supreme
Court, No. 12-138.
(Reporting by Lawrence Hurley; additional reporting by Alejandro Lifschitz;
editing by Howard Goller and Douglas Royalty)
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