Procedural Posture

This document is a Decision on Stay of Enforcement issued by an ICSID ad hoc Committee in the annulment proceedings initiated by the Argentine Republic against Casinos Austria International GmbH and Casinos Austria Aktiengesellschaft. The Applicant requested the continuation of the provisional stay of enforcement of the arbitral award rendered on 5 November 2021, pending the resolution of its annulment application.

Parties' Positions

The Applicant argued that the stay should be continued unconditionally, asserting its historical track record of compliance with international obligations and contending that the award creditors would suffer no prejudice because the Award's interest provisions would adequately compensate for any delay. Furthermore, the Applicant alleged that lifting the stay would cause it severe detriment by diverting funds earmarked for essential public policies and creating recoupment difficulties if the Award were ultimately annulled.

The Respondents on Annulment opposed the stay, characterizing the request as a dilatory tactic and highlighting a significant risk of non-compliance. Crucially, they argued that the 4% compound interest rate stipulated in the Award was substantially outpaced by current global inflation rates (estimated at 8–9%), meaning that a delayed payment would result in actual, uncompensated financial deterioration of the Award's value. In the alternative, they requested that any continuation of the stay be conditioned upon the posting of adequate security.

Committee's Analysis

The Committee determined that Article 52(5) of the ICSID Convention creates no presumption either in favor of or against a stay of enforcement; rather, the Committee must exercise its discretion based on the specific circumstances of the case. In its analysis, the Committee found the Applicant's reliance on past settlement agreements inconclusive as evidence of voluntary compliance. Most notably, the Committee accepted the Respondents' economic argument regarding inflation. It held that the disparity between the Award's 4% interest rate and current inflation levels meant the Respondents would suffer tangible financial harm if enforcement were delayed, a factor militating strongly against continuing the stay.

Additionally, the Committee found that the Applicant failed to substantiate its claims of severe detriment. The Applicant provided no concrete evidence that immediate payment would necessitate reductions in specific social budgets, nor did it demonstrate an appreciable risk that funds could not be recouped from the Respondents—who are solvent corporate entities—in the event of annulment.

Decision

Concluding that the Applicant failed to establish circumstances requiring the continuation of the stay, the Committee refused the Request for a Continued Stay of Enforcement. The allocation of costs arising from the request was reserved for a subsequent stage of the proceedings.