King & Spalding has announced that its international arbitration team has earned a key victory for Sempra Energy in the company's claim against the government of Argentina. King & Spalding won $172 million for its client, making this award one of the five largest ever granted by the International Centre for Settlement of Investment Disputes (ICSID), an organization of the World Bank Group. This award brings to more than $500 million the total amount awarded to firm clients with claims against Argentina.
The dispute arose from the passage of Argentina's so-called "Emergency Law" in January 2002, during the height of Argentina's 2001-2002 economic crisis. The law "pesified" (i.e., converted from U.S. dollars to Argentine pesos) and froze all public utility tariffs, including those of Sempra Energy's interests in twogas distribution companies, Camuzzi Gas del Sur S.A. (CGS) and Camuzzi Gas Pampeana S.A. (CGP).Sempra Energy also claimed millions of dollars in unpaid subsidies for the distribution of natural gas.
Sempra Energy claimed that the "Emergency Law" measures and the failure to timely pay the subsidies violated the terms of CGS and CGP's licenses and Argentina's obligations to Sempra Energy under the bilateral investment treaty (BIT) between the United States and Argentina.
The Houston-based King & Spalding team representing Sempra Energy was led by partners R. Doak Bishop and Craig S. Miles, who were assisted by associates Roberto J. Aguirre Luzi, Wade M. Coriell and Martin F. Gusy.