French water and waste management company Suez announced Thursday that it had received 220 million euros in compensation from the government, settling one of its legal disputes with Argentina
The payment refers to the termination of a contract in 2006, which the Argentine government carried out unilaterally.
"The Argentine government and Siez have concluded and implemented a transactional settlement agreement in compliance with the ruling handed down by the World Bank’s International Center for Settlement of Investment Disputes (ICSID) in favour of Suez in respect of the Buenos Aires water and wastewater management concession, terminated in 2006," the French company wrote in a statement.
"Several Suez group entities, both internal and external, having been parties to the proceedings will benefit from the agreement, which applies a percentage reduction identical to that granted by Argentina for the settlement of previous ICSID sentences. For the Suez Group alone, the cash amount received is €220 million," the company said, adding that the money would be disclosed via the group's accounts at the end of June.
The waste and water group warned back in February that it has contacted "specialised funds" to explore the possibility selling its debt claims against Argentina, given the lack of progress in agreeing a deal.
The dispute dates back to March, 2006, when the government of president Néstor Kirchner rescinded a contract with Suez, which had operated the management of water and sanitation services in Buenos Aires City since 1993 through its subsidiary Aguas Argentinas. Kirchner alleged that the French group had failed to comply with scheduled investments.
The International Centre for Settlement of Investment Disputes (ICSID) arbitrated two debts in favour of Suez in 2015, ordering Argentina to pay the company and its partners about US$630 million. The country owes close to US$405 million for ending the contract in the capital and a further US$225 million for a contract with Santa Fe City. Thursday's agreement refers to the ruling regarding the latter, and the firm Aguas Provinciales de Santa Fé, Argentina.
"The ruling marks a major milestone in the dispute settlement proceedings," read Suez's press release. "A new phase has now begun with a view to obtaining the implementation of ICSID’s decision for this second sentence."