INTERNATIONAL CENTRE FOR SETTLEMENT OF INVESTMENT DISPUTES
WEBUILD S.P.A.
Claimant
and
ARGENTINE REPUBLIC
Respondent / Applicant
ICSID Case No. ARB/15/39
Annulment Proceeding
Members of the ad hoc Committee
Mr. Fernando Piérola Castro, President of the ad hoc Committee
Mr. Alexis Mourre, Member of the ad hoc Committee
Ms. Carita Wallgren-Lindholm, Member of the ad hoc Committee
Secretary of the ad hoc Committee
Ms. Laura Arboleda Gutiérrez
3 July 2026
5. On 21 January 2026, Argentina filed an application for annulment of the Award (the “Annulment Application”) and requested the stay of enforcement of the Award pursuant to Article 52(5) of the ICSID Convention (or the “Convention”).
6. On 26 January 2026, the ICSID Secretary-General registered the Annulment Application and informed the Parties of the provisional stay of the Award pursuant to ICSID Arbitration Rule 54(2).
7. On 5 March 2026, the ICSID Secretary-General proposed the appointment to the ad hoc Committee (the “Committee”) of Mr. Fernando Piérola Castro, a national of Peru and Switzerland, as President, Mr. Alexis Mourre, a national of France, and Ms. Carita Wallgren-Lindholm, a national of Finland, as Committee Members, and invited the Parties to provide any comments by 12 March 2026.
1 The Award incorporated the Decision on Jurisdiction and Admissibility dated 23 February 2018, the Decision on Liability and Directions on Quantum dated 3 March 2023, and the Decision on the Respondent’s Request for Reconsideration dated 25 September 2024. The Award was rectified by the Decision on the Claimant’s Request for Rectification and the Respondent’s Request for Rectification and Supplementary Decision dated 23 September 2025, which became part of the Award. ↩
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8. By communications dated 12 and 13 March 2026, the Respondent and the Claimant, respectively, provided their respective observations on the proposed appointments.
9. On 16 March 2026, Mr. Mourre and Ms. Wallgren-Lindholm responded to the Parties’ observations, and ICSID invited the Parties to submit any further observations by 23 March 2026.
10. On 10 April 2026, the ICSID Secretary-General informed the Parties that the Members of the Committee had accepted their appointments and that the Committee had been constituted in accordance with Article 52(3) of the ICSID Convention. Its members are Mr. Fernando Piérola Castro, a national of Peru and Switzerland, as President, Mr. Alexis Mourre, a national of France, and Ms. Carita Wallgren-Lindholm, a national of Finland. Ms. Laura Arboleda Gutiérrez, Legal Counsel, ICSID, was appointed to serve as Secretary of the Committee.
11. On 17 April 2026, the Centre invited the Parties to confirm their availability for the First Session.
12. On 21 April 2026, the Claimant confirmed its availability and proposed a schedule for the exchange of briefs concerning Argentina’s Stay Application.
13. On 22 April 2026, the Centre acknowledged receipt of Webuild’s communication and invited Argentina to submit any observations by 24 April 2026.
14. Likewise, on 22 April 2026, Argentina confirmed its availability for the First Session and reserved its right to respond to Webuild’s communication by the relevant deadline.
15. On 23 April 2026, the Committee confirmed that the First Session would be held on 2 June 2026 and informed the Parties that, once it had received the Parties’ views regarding the handling of the Stay Application, it would decide thereon and inform the Parties accordingly. Finally, pursuant to Arbitration Rule 54(2), the Committee extended the stay of enforcement of the Award until it reached a final decision on the continuation of the stay.
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16. On 24 April 2026, pursuant to the Committee’s instructions, Argentina provided its observations on Webuild’s communication of 21 April 2026, proposing an alternative schedule for the exchange of briefs.
17. On 27 April 2026, the Centre circulated a draft of Procedural Order No. 1 (“PO1”) and invited the Parties to submit their joint comments by 18 May 2026. The Committee also established a schedule for the exchange of briefs on the Stay Application. As for the procedural timetable for the annulment phase, the Committee informed the Parties that it would be determined after receipt of the Parties’ comments on PO1 and the resolution of any outstanding issues at the First Session.
18. Pursuant to the timetable established by the Committee, on 14 May 2026, Argentina filed its Request for the Continued Stay of Enforcement of the Award (“Argentina’s Request”), together with a consolidated index of exhibits; factual exhibits A RA 0059 and A RA 0645 through A RA 0674; and legal authorities AL RA 0263 and AL RA 0429 through AL RA 048.
19. On 29 May 2026, Webuild filed its Response to Argentina’s Request for a Stay of Enforcement (“Webuild’s Response”), together with a consolidated index of exhibits; factual exhibits C-0474 through C-0521; and legal authorities CL-0264 through CL-0293.
20. On 2 June 2026, the Committee allocated time for each Party to present its position on the Stay Application following the First Session, after which the Committee would put questions to the Parties. For that purpose, the Committee authorized the Parties to use presentation slides, to be submitted electronically prior to or at the outset of the First Session.
21. On 1 June 2026, Webuild informed the Committee of a correction to paragraph 55 of its Response and requested that the correction be admitted into the record. Webuild submitted both a redline and a clean version of its Response.
22. On the same date, the Argentina sought to introduce additional documents into the record in response to certain allegations contained in Webuild’s Response. Webuild objected to the introduction of those documents and requested that the Committee reject them.
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23. On 2 June 2026, the Committee held the First Session and the Hearing on the Continuation of the Stay of Enforcement (the “Hearing”) by videoconference. The following persons participated:
Committee:
Mr. Fernando Piérola-Castro President
Mr. Alexis Mourre Member of the Committee
Ms. Carita Wallgren-Lindholm Member of the Committee
ICSID Secretariat:
Ms. Laura Arboleda Gutiérrez Secretary of the Committee
On behalf of the Claimant:
Mr. Roberto Aguirre Luzi King & Spalding
Mr. Craig S. Miles King & Spalding
Ms. Eldy Quintanilla Roché King & Spalding
Mr. Juan M. Poggio Aguerre King & Spalding
Mr. Esteban Sánchez King & Spalding
Ms. María Jesús Herrera Ramognini King & Spalding
Ms. Eleonora Ebau Webuild S.p.A.
On behalf of the Respondent:
Mr. Julio Castro Videla Subprocurador del Tesoro de la Nación
Ms. María Alejandra Etchegorry Procuración del Tesoro de la Nación
Ms. María Soledad Romero Caporale Procuración del Tesoro de la Nación
Ms. Annabella Sandri Fuentes Procuración del Tesoro de la Nación
Ms. Daniela Rodríguez Procuración del Tesoro de la Nación
24. During the First Session, the Parties and the Members of the Committee discussed draft PO1. The Parties also presented their respective oral submissions on: (i) Argentina’s attempt to introduce additional documents into the record, and (ii) Webuild’s request that the correction in paragraph 55 of its Response be recorded.
25. With respect to those matters, the Committee decided that, in light of the procedural timetable and the timing of Argentina’s communication of 1 June 2026, the additional documents could not be relied upon for purposes of the Hearing. The Committee further took note of Webuild’s corrections to paragraph 55 of its Response and indicated that Argentina could address any resulting comparative argument in its post-hearing
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submission, the relevance and weight of which the Committee would determine, if appropriate, in its Decision on the Stay.
26. Following the First Session, on 10 June 2026, the Committee issued PO1, which provides the agreement of the Parties on procedural matters and the Committee’s decisions on those matters where no agreement had been reached. PO1 provided, inter alia, that the applicable Arbitration Rules would be those in effect from 10 April 2006, that the procedural language would be English and Spanish, and that the place of proceeding would be Washington D.C., United States. PO1 also set out in Annex B a Procedural Calendar with the schedule for the Parties’ submissions on the Stay Application.
27. On 16 June 2026, the Centre circulated a letter to the Parties recording the Committee’s decisions, as stated during the Hearing, on the Parties’ respective requests of 1 June 2026.
28. On 16 June 2026, each Party filed a post-hearing brief confined to matters arising from the Hearing (“Argentina’s PHB” and “Webuild’s PHB”).
29. The Parties seek different forms of relief. Argentina requests that the Committee continue the stay of enforcement of the Award, without conditions, for the duration of the annulment proceeding. Webuild requests that the Committee reject Argentina’s Stay Application. In the alternative, should the Committee decide to continue the stay, Webuild requests that such continuation be conditioned upon Argentina’s provision of adequate financial security.
30. In support of their respective requests, the Parties have advanced submissions concerning: (i) the applicable legal standard and burden of proof; and (ii) the circumstances that, in their respective views, warrant or do not warrant the continuation of the stay of enforcement. The Committee addresses these issues in turn.
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31. Argentina submits that either party to an ICSID dispute has the right under Article 52 of the ICSID Convention to request annulment of an award, which is characterized as essential to preserve the integrity of the ICSID arbitration system, including “a state party participant’s continued confidence” in it.2 Argentina further submits that, absent particular reasons and evidence to the contrary, an application for annulment must be presumed to have been made in good faith and that a request for a stay constitutes a justified exercise of the applicant’s procedural rights of defence.3 Argentina further contends that the right to enforce an award is of no greater importance than the right to seek its annulment.4 In its view, permitting a stay is therefore a further step towards preserving the award’s prospective finality and enforceability.5
32. In Argentina’s view, the applicant must simply advance the circumstances justifying the stay, while the opposing party bears the burden of establishing that the circumstances invoked do not require the stay to be continued.6
33. Argentina notes that no rules prescribe the types of circumstances that may justify a stay, and that the Committee therefore has discretion to identify and weigh the circumstances
2 Argentina’s Request, ¶ 7 (referring to AL RA 429, Azurix Corp. v. Argentine Republic, ICSID Case No. ARB/01/12, Decision on the Argentine Republic’s Request for a Continued Stay of Enforcement of the Award, 28 December 2007, ¶¶ 28 and 33). ↩
3 Argentina’s Request, ¶ 7 (referring to AL RA 432, Enron Corporation & Ponderosa Assets, L.P. v. Argentine Republic, ICSID Case No. ARB/01/3, Decision on the Argentine Republic’s Request for a Continued Stay of Enforcement of the Award, 7 October 2008, ¶ 47, and other ICSID Proceedings at footnotes 1-4); Argentina’s PHB, ¶ 4. ↩
4 Argentina’s Request, ¶ 8 (referring to AL RA 434, RREEF Infrastructure (G.P.) Limited and RREEF Pan-European Infrastructure Two Lux S.à r.l. v. Kingdom of Spain, ICSID Case No. ARB/13/30, Decision on Stay of Enforcement of Award, 28 October 2020, ¶ 48). ↩
5 Argentina’s Request, ¶ 9 (referring to AL RA 435, Watkins Holdings S.à r.l. et al. v. Kingdom of Spain, ICSID Case No. ARB/15/44, Decision on the Stay of Enforcement of the Award, 28 June 2021, ¶ 49). ↩
6 Argentina’s Request, ¶ 10; Argentina’s PBH, ¶ 5 (referring to AL RA 455, Venezuela Holdings B.V. and others v. Bolivarian Republic of Venezuela, ICSID Case No. ARB/07/27, Procedural Order No. 2, 28 July 2015, ¶ 8; and AL RA 436, LSF-KEB Holdings SCA et al. v. Republic of Korea, ICSID Case No. ARB/12/37, Decision on Stay of Enforcement, 15 December 2023, ¶ 74). ↩
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relevant to the case at hand.7 Nonetheless, and contrary to what Webuild argue, Argentina argues that the ICSID Convention does not require extraordinary circumstances for a stay of enforcement.8
34. In that regard, Argentina argues that ad hoc committees have frequently continued the stay of enforcement, even being characterized by some of them as a standard practice that should be followed unless very exceptional circumstances indicate that this should not occur.9
35. Webuild notes that ICSID awards are final and binding. It submits that both an annulment request and a stay of enforcement are extraordinary remedies or measures, which must be justified by the applicant, and as such should not be granted lightly.10 In Webuild’s view, a stay should not be granted simply because it is requested by a State.11 The filing of an annulment application does not create a presumption that the award is no longer final or enforceable, nor does it result in an automatic stay of enforcement.12
36. Webuild agrees with Argentina that no rules prescribe the circumstances that may justify a stay, and that the Committee enjoys a measure of discretion in this regard.13 However, under ICSID Arbitration Rule 54(4), Webuild submits that the burden rests on the party requesting the stay to “specify the circumstances that require the stay,” and Argentina has
7 Argentina’s Request, ¶ 11 (referring to AL RA 437, Patrick Mitchell v. Democratic Republic of Congo, ICSID Case No. ARB/99/7, Decision on Stay of Enforcement of Award, 30 November 2004, ¶ 23 and other ICSID Proceedings at footnote 10). ↩
8 Argentina’s PBH, ¶ 4 (referring to AL RA 432, Enron Corporation & Ponderosa Assets, L.P. v. Argentine Republic, ICSID Case No. ARB/01/3, Decision on the Argentine Republic’s Request for a Continued Stay of Enforcement of the Award, 7 October 2008, ¶ 47, and AL RA 435, Watkins Holdings S.à r.l. et al. v. Kingdom of Spain, ICSID Case No. ARB/15/44, Decision on the Stay of Enforcement of the Award, 28 June 2021, ¶ 49). ↩
9 Argentina’s Request, ¶ 12 (referring to AL RA 432, Enron Corporation & Ponderosa Assets, L.P. v. Argentine Republic, ICSID Case No. ARB/01/3, Decision on the Argentine Republic’s Request for a Continued Stay of Enforcement of the Award, 7 October 2008, ¶ 43). ↩
10 Webuild’s Response, ¶¶ 6, 26 and 27; Webuild’s PHB, ¶ 1. ↩
11 Webuild’s Response, ¶ 26. ↩
12 Webuild’s Response, ¶¶ 27-28 (referring to CL-267, Sempra Energy International v. Argentine Republic, ICSID Case No. ARB/02/16, Decision on the Argentine Republic’s Request for a Continued Stay of Enforcement of the Award, 5 March 2009, ¶ 27). ↩
13 Webuild’s Response, ¶ 32. ↩
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failed to discharge its burden of demonstrating that the stay should be continued.14 Webuild further disputes that the continuation of a stay reflects a standard practice in ICSID proceedings. According to Webuild, only 27 of 94 decisions resulted in stays of enforcement being continued without conditions and, in proceedings involving Argentina, a stay was continued – either unconditionally or on the basis of general assurances – in only 7 out of 14 cases.15
37. The Committee recalls, as a starting point, that, pursuant to Article 53 of the ICSID Convention, the Award is binding on the parties and each Party shall abide by and comply with the terms of the award, “except to the extent that enforcement shall have been stayed pursuant to the relevant provisions of this Convention.”
38. In this regard, Article 52(5) of the Convention empowers the Committee to stay enforcement of the Award, but only “if it considers that the circumstances so require”:
The Committee may, if it considers that the circumstances so require, stay enforcement of the award pending its decision. If the applicant requests a stay of enforcement of the award in his application, enforcement shall be stayed provisionally until the Committee rules on such request.
39. In turn, Arbitration Rule 54(4) provides that the circumstances invoked in support of a continued stay must be specified in the request:
A request [for the continued stay of enforcement] shall specify the circumstances that require the stay or its modification or termination. A request shall only be granted after the Tribunal or Committee has given each party an opportunity of presenting its observations.
14 Webuild’s Response, ¶ 31; Webuild’s PHB, ¶ 1. ↩
15 Webuild’s Response, ¶¶ 29-30. ↩
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40. Accordingly, neither the filing of an application for annulment nor the resulting provisional stay determines whether the stay should be continued. The continuation of the stay depends on whether the Committee considers that the specified circumstances so require.
41. This calls for a careful assessment of the relevant circumstances invoked by the Parties, taking into account both the enforceability of the Award and the applicant’s right to seek its annulment under the conditions provided for in the Convention.
42. In that context, the Committee does not approach its task from a predetermined premise either in favor of maintaining or lifting the stay. The Convention does in fact not establish a presumption in one sense or another. The starting point remains however that, pursuant to Article 53, the Award is binding and that, pursuant to Article 52(5), a stay can only be maintained if circumstances exist that so justify. Although Article 52(5) does not require a showing of extraordinary circumstances, the applicant has the onus of establishing the existence of circumstances justifying the maintenance of the stay.
43. The Committee further stresses that, in assessing whether such circumstances exist, it does not engage in any valuation of the prima facie likelihood of success of the Annulment Application. Consequently, its assessment of the request for the continuation of the stay of enforcement of the Award does not in any way prejudge the assessment that it will undertake, in due course, of the merits of that application.
44. In this connection, the Committee notes that, although Webuild has made certain submissions concerning the grounds advanced in the Application for Annulment,16 nothing in the material before it at this stage provides a basis, for purposes of this Decision, to question the good faith of Argentina’s filing of the Application for Annulment.
45. Before turning to the circumstances invoked by the Parties, the Committee takes note of Argentina’s submission that it was prevented from submitting documents, that in its view, were necessary to rebut several of Webuild’s allegations, and that it therefore did not have a meaningful opportunity to respond to those allegations. As reflected in Argentina’s Index of Additional Documentation of 1 June 2026, fourth column, those allegations would
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concern the factual background and merits of the application, the practice relating to stays of enforcement, Argentina’s compliance with ICSID awards and related enforcement proceedings, the impact of a continued stay, the impact of enforcement on Argentina, and the possible provision of security.
46. When it ruled that the Additional Documentation submitted by Argentina on 1 June 2026 could not be relied upon for purposes of the Hearing held on 2 June 2026, the Committee stressed that new evidence could be submitted with the post-hearing briefs provided that it relate to matters having arisen at the Hearing. Argentina did however not submit any new evidence (and any of the documents listed in its Index) with its post-hearing brief.
47. The Committee considers that, this being the case, the Stay Application must be decided on the basis of the evidence properly in the record. Argentina could not, without seriously affecting Webuild’s procedural rights, rely at the Hearing on evidence that it would have introduced only one day before. However, it could have made an application to introduce all or part of the documents listed in the Index in its post-hearing brief, or introduced therein documents bearing on matters having arisen at the Hearing. It did not do so. Accordingly, the Stay Application must be decided on the basis of the evidence properly introduced into the record.
48. In its Request for the Continued Stay of Enforcement of the Award, Argentina specifies the following circumstances as requiring the continuation of the stay:
17 Argentina’s Request, ¶¶ 14-20; Argentina’s PHB, ¶¶ 6-14. ↩
18 Argentina’s Request, ¶¶ 21-25; Argentina’s PHB, ¶¶ 15-23. ↩
19 Argentina’s Request, ¶¶ 26-41; Argentina’s PHB, ¶¶ 24-34. ↩
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49. Webuild challenges Argentina’s reliance on its legal framework as a safeguard for compliance with ICSID awards. It submits instead that the Committee should focus on what it characterizes as a more telling criterion: the risk of non-compliance by Argentina in the event the Award is upheld.20 Furthermore, Webuild argues that it will suffer irreparable harm if the stay were continued,21 and that Argentina would face no material risk of non-recoupment in the event that the Award were subsequently annulled.22
50. The Committee will now turn to the assessment of the circumstances invoked by the Parties.
a. Argentina
51. Argentina submits that its domestic legal order ensures compliance with ICSID awards.23 Argentina explains that, pursuant to Article 75(22) of the Argentine Constitution, the ICSID Convention and the applicable treaty, i.e., the Argentina–Italy BIT, enjoy a higher legal hierarchy than domestic legislation, thereby ensuring that international obligations are directly enforceable within Argentina’s legal system.24 Argentina further argues that ICSID awards are automatically recognized as binding and enforceable, without the need for exequatur proceedings, in accordance with the Convention.25
52. Argentina refers to instances of compliance with international awards, including Urbaser v. Argentina (“Urbaser”),26 and to a 2015 judgment of Argentina’s National Court of Appeals in Commercial Matters confirming that ICSID awards are binding and do not require exequatur for recognition or enforcement.27 Argentina also highlights its record of
20 Webuild’s Response, ¶¶ 35-51; Webuild’s PHB, ¶¶ 19-30. ↩
21 Webuild’s Response, ¶¶ 52-56; Webuild’s PHB, ¶¶ 7-11. ↩
22 Webuild’s Response, ¶¶ 56-66; Webuild’s PHB, ¶¶ 3 and 15. ↩
23 Argentina’s Request, ¶¶ 14-20; Argentina’s PHB, ¶¶ 1, 6-14. ↩
24 Argentina’s Request, ¶¶ 14-16. ↩
25 Argentina’s Request, ¶ 17, Argentina’s PHB, ¶ 7. ↩
26 Argentina’s Request, ¶ 18 (referring to AL RA 263, Urbaser S.A. and Consorcio de Aguas Bilbao Bizkaia, Bilbao Biskaia Ur Partzuergoa v. Argentina Republic, ICSID Case No. ARB/07/26, Award, 8 December 2016). ↩
27 Argentina’s Request, ¶ 17. ↩
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reaching settlement agreements with creditors, and the fact that a bill has been submitted to Congress seeking approval for settlement agreements with two groups of creditors.28
53. Argentina submits that the Urbaser proceedings provide a recent and practical illustration of the effectiveness of its domestic framework for the enforcement of ICSID awards: Argentine courts recognized the binding and res judicata effect of the award, confirmed that no exequatur was required, and the award was paid in 2025 following domestic enforcement proceedings.29 Argentina contrasts that experience with the enforcement proceedings in Impregilo v. Argentina (“AGBA”) and Teinver in the United States.30 It argues that Webuild waited more than seven years after the conclusion of the AGBA annulment proceeding before commencing enforcement, which led Argentina to raise a statute-of-limitations defence, while the delay in Teinver was attributable to disputes among competing creditors regarding the right to enforce the award. Argentina notes that both U.S. proceedings remain pending on appeal.31
54. Argentina further submits that certain payment agreements criticized by Webuild were negotiated settlements through which award creditors accepted terms satisfactory to them, rather than instances of non-compliance.32 It also contends that it paid the Hochtief award promptly after the termination of the stay of enforcement in August 2021, pursuant to a settlement agreement resolving the underlying dispute and annulment proceedings.33 Argentina further argues that Webuild relies on an outdated U.S. decision concerning Argentina’s past default, whereas more recent decisions have acknowledged Argentina’s efforts to settle disputes with bondholders.34 Finally, Argentina submits that its ongoing efforts to obtain congressional approval for settlements with remaining holdout creditors demonstrate its willingness to resolve outstanding sovereign-debt obligations.35
28 Argentina’s Request, ¶¶ 19-20. ↩
30 Argentina’s PHB, ¶¶ 9-10. ↩
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b. Webuild
55. For Webuild, the extent to which Argentina’s legal framework safeguards compliance with ICSID awards is of limited relevance. It submits that Argentina has, in practice, adopted a policy of not paying international awards or judgments, does not voluntarily comply with ICSID awards, thereby compelling award creditors to pursue enforcement proceedings in multiple jurisdictions, and has structured its assets to shield them from enforcement by judgment creditors abroad.36
56. By way of example, Webuild points to Argentina’s failure to pay the 2011 AGBA award, which, more than 12 years later, allegedly remains unpaid and has accrued to approximately USD 67.9 million.37 Webuild also submits that the same pattern is reflected in other cases. It refers to Teinver, in which Argentina unsuccessfully sought annulment and subsequently opposed enforcement proceedings brought in the United States; to SAUR, in which the award remained unpaid following the dismissal of Argentina’s annulment application and enforcement proceedings were initiated in 2026; and to Mobil, in which Argentina has likewise not paid following the dismissal of its annulment application. In Webuild’s submission, these examples demonstrate that, if the present Award is upheld, it may face protracted and costly enforcement efforts before obtaining payment.38
57. Webuild also refers to Urbaser, where Argentina did not seek annulment but, according to Webuild, required the award creditors to pursue domestic enforcement proceedings before making payment. It submits that Argentina paid the award only after those proceedings were commenced, approximately eight years and nine months after the award was rendered.39 In this sense, Webuild argues that Argentina has repeatedly delayed payment of final awards and, in several cases, settled only after obtaining a 25% reduction of the amounts claimed. It further notes that more recent proposed settlements reportedly contemplate reductions exceeding 30%, without reimbursement of legal fees.40
36 Webuild’s Response, ¶¶ 8-11, 34, 36; Webuild’s PHB, ¶¶ 19-30. ↩
37 Webuild’s Response, ¶¶ 8-9, 37-42. ↩
38 Webuild’s Response, ¶¶ 43-46; Webuild’s PHB, ¶¶ 4 and 27. ↩
39 Webuild’s Response, ¶ 47; Webuild’s PHB, ¶ 27. ↩
40 Webuild’s Response, ¶¶ 48, 50. ↩
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58. Webuild further notes that, in the Palladian proceedings in the United Kingdom, the English Court of Appeal required Argentina to provide security pending appeal, referring to its continuing pattern of default and delay.41 It submits that Argentina has a financial incentive to delay compliance, as the 6% post-award interest rate is materially lower than Argentina’s cost of borrowing on international markets, creating a financial disincentive to pay promptly.42
59. It also contends that Argentina’s proposed settlements with Bainbridge and Attestor, while the AGBA Award remains unpaid, show that Argentina pays only once creditors have obtained effective judicial leverage.43
60. Webuild submits that Argentina has sought to invoke the time elapsed since an award was rendered to oppose enforcement, including time consumed by its own annulment proceedings and subsequent settlement negotiations. It contends that, in the AGBA matter, Webuild did not oppose the stay and pursued a negotiated resolution—including a proposed 25% reduction and payment in sovereign bonds—but that Argentina never executed the settlement; accordingly, Argentina should not be permitted to rely on such delay to challenge later enforcement efforts.44
61. In Webuild’s view, the Committee’s question – on the weight that should be given to Argentina’s legal framework as compared to the record of how that framework has operated in practice – goes to the heart of this matter.45 Webuild submits that Argentina’s answer at the Hearing demonstrated that, rather than evidencing voluntary compliance, its legal framework operates in practice through coercion.46 According to Webuild, Argentina’s counsel acknowledged that the government had refused to pay, and that it was
41 Webuild’s Response, ¶ 49. ↩
42 Webuild’s Response, ¶ 51; Webuild’s PHB, ¶ 2. ↩
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the Argentine courts, rather than the government, that enforced compliance with the ICSID Convention in the Urbaser judgment.47
62. Webuild requests that the Committee accord no weight to the theoretical existence of a legal framework and decisive weight to what it characterizes as a demonstrated pattern of non-compliance. Webuild further submits that the Hearing confirmed that Argentina will not voluntarily comply with the Award absent an enforcement order compelling it to do so.48
c. The Committee’s Evaluation
63. The Committee has carefully considered the Parties’ respective submissions. It acknowledges Argentina’s explanations regarding the legal framework through which ICSID awards may be given effect within its domestic legal order, as well as its submissions concerning efforts to resolve outstanding obligations. The Committee also recognizes the relevance of Webuild’s concerns regarding payment, compliance, and the delays that may arise during the post-award stage.
64. The relevant question under Article 52(5) of the ICSID Convention and Rule 54(4) of the Arbitration Rules is whether the circumstances invoked by Argentina in relation to its legal framework and practice concerning compliance with ICSID awards make it necessary for enforcement of the Award to remain stayed until the Committee has ruled on the Application for Annulment. It is not whether the continuation of the stay would take place within a legal environment capable of affording confidence that, if the Award were not annulled, the obligations imposed by it would be complied with, nor whether past instances of compliance or non-compliance reveal some degree of risk in that regard. For these purposes, the term “require” refers to circumstances that make the continuation of the stay necessary; it is not sufficient that any safeguard afforded by that domestic legal framework may mitigate Webuild’s concerns, lessen the practical prejudice which Webuild alleges it
48 Webuild’s PHB, ¶¶ 1 and 29. ↩
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would suffer as a result of the stay, or afford greater confidence that Argentina would comply with the Award if it were not annulled.
65. Accordingly, the Committee need not—and does not purport to—form a view as to the integrity or adequacy of Argentina’s legal system, nor definitively resolve the significance of the individual post-award experiences invoked by Webuild. Such matters may be relevant to the Parties’ respective concerns regarding voluntary compliance and the practical consequences of a stay. They do not, however, by themselves answer the distinct question whether, in the circumstances of this case, the continuation of the stay is required.
66. Thus, the Committee does not consider that the circumstances invoked by Argentina in relation to its domestic legal framework and practice concerning compliance with ICSID awards constitute circumstances that require the continuation of the stay within the meaning of Article 52(5) of the ICSID Convention and Rule 54(4) of the Arbitration Rules.
a. Argentina
67. Argentina contends that Webuild will not suffer any harm, beyond delay, from a continued stay of enforcement.49 It submits that any delay in payment is an inherent consequence of annulment proceedings and is fully compensated by post-award interest running on the Award.50 Such interest rate would have been already discussed by the Parties and decided to be appropriate by the Tribunal.51 Argentina further notes that annulment committees have recognized that Article 52(5) of the ICSID Convention conditions a creditor’s rights during annulment proceedings, such that a temporary postponement of enforcement cannot, in itself, constitute prejudice to the award creditor.52
49 Argentina’s Request, ¶¶ 21-25; Argentina’s PHB, ¶¶ 1 and 15-23. ↩
50 Argentina’s Request, ¶¶ 21-22. Such a delay, quoting the annulment committee in Gardabani Holdings B.V. and Silk Road Holdings B.V. v. Georgia would not amount to prejudice (see, footnote 27 referring to AL RA 466, Gardabani Holdings B.V. and Silk Road Holdings B.V v. Georgia, ICSID Case No. ARB/17/29, Decision on Georgia’s Request for the Continuation of the Stay of Enforcement of the Award, 8 August 2023, ¶ 87). ↩
51 Argentina’s PHB, ¶ 16 (Argentina further notes that Webuild could have sought the annulment of the Award in this regard and that it is not appropriate for it to now attempt to reopen an issue that it chose not to challenge). ↩
52 Argentina’s Request, ¶¶ 23-24, (referring to AL RA 429, Azurix Corp. v. Argentine Republic, ICSID Case No. ARB/01/12, Decision on the Argentine Republic’s Request for a Continued Stay of Enforcement of the Award, 28 ↩
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68. Argentina also notes that Webuild is a large, well-established, and financially robust global construction group, and therefore is not in a position of financial vulnerability such that a temporary delay in payment would be prejudicial.53
69. Argentina further responds to Webuild’s interest-rate comparison that the cost of capital is not an interest rate, but a discount rate used to value projected future cash flows, which incorporates compensation for business risk, and such risks would not be borne by Webuild in relation to the Award amount during the stay.54 Webuild’s argument, in Argentina’s view, assumes a guaranteed return while ignoring those risks. Argentina also submits that Webuild’s reliance on Argentina’s cost of debt is based on a letter that the Tribunal expressly declined to admit and on outdated data.55
70. Argentina also argues that Webuild’s loss-of-priority argument lacks a legal basis as there would not be an insolvency regime for sovereign States establishing a priority ranking among creditors, and therefore no legally recognized priority from which Webuild could be displaced. In any event, in Argentina’s view, the possibility of being placed behind other creditors has not been considered a significant risk factor sufficient to justify lifting a stay.56
71. Finally, Argentina notes that Webuild itself has acknowledged that Argentina holds no executable assets abroad. In these circumstances, Webuild could not claim to be prejudiced by not being able to initiate proceedings that, by its own admission, would yield no immediate result.57
b. Webuild
72. Webuild contends that the continuation of the stay would cause it concrete and irreparable harm. It submits that the interest rate provided in the Award (6%) is significantly lower
December 2007, ¶ 42; and AL RA 432, Enron Corporation & Ponderosa Assets, L.P. v. Argentine Republic, ICSID Case No. ARB/01/3, Decision on the Argentine Republic’s Request for a Continued Stay of Enforcement of the Award, 7 October 2008, ¶ 52).
53 Argentina’s Request, ¶ 25. ↩
56 Argentina’s PHB, ¶¶ 19-20. ↩
57 Argentina’s PHB, ¶¶ 22-23. ↩
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than its cost of capital (approximately 8.9%), resulting in ongoing financial loss that is not fully compensated by the Award interest.58 In response to Argentina’s argument that the cost of capital is not an appropriate comparator, Webuild submits that Argentina misses the point. According to Webuild, enforcement of an award against Argentina is not a risk-free undertaking, but may entail years of proceedings with uncertain outcomes, substantial legal costs that may not be recovered, and settlements at a discount.59
73. Webuild argues that a continued stay would place it behind other creditors and expose it to lengthy, costly, and uncertain enforcement proceedings worldwide against a respondent with a documented record of resistance to compliance.60
74. Webuild distinguished the Watkins v. Spain case mentioned by Argentina. In Webuild’s view, in that case the applicable interest rate exceeded the rate of Spanish government bonds and was therefore considered sufficient to compensate the claimants for any delay in payment. By contrast, Webuild submits that the interest rate in the present case does not provide such compensation. In Webuild’s view, this distinction reinforces the prejudice it would suffer from a continued stay.61
75. Webuild further submits that the Award’s 6% post-award interest rate lies below both its weighted average cost of capital (approximately 8.9%) and Argentina’s own cost of debt (approximately 9.26%), which in its view gives Argentina a financial incentive to delay payment indefinitely while economically harming Webuild.62
c. The Committee’s Evaluation
76. As noted above, an award is binding and enforceable unless the circumstances require that its enforcement be stayed. With that principle in mind, the Committee has carefully
58 Webuild’s Response, ¶ 53. ↩
60 Webuild’s Response, ¶¶ 53-56. ↩
61 Webuild’s Response, ¶¶ 54-55. See also Webuild’s PHB, ¶ 10 regarding Watkins v. Spain where Webuild argues that Spain is the fifth-largest EU economy with no sovereign default history, and that the interest rate in Watkins was 2.16% compounded monthly, a rate that exceeded Spanish government bond rates and created no perverse incentive to delay payment. In Webuild’s view, Argentina’s situation is categorically different. ↩
62 Webuild’s Response, ¶ 51; Webuild’s PHB, ¶ 2. ↩
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considered Argentina’s submission that the continuation of the stay would not cause Webuild prejudice beyond a temporary postponement of payment, which, in Argentina’s view, is inherent in annulment proceedings and is adequately compensated by the post-award interest provided for in the Award. The Committee has also taken note of Argentina’s submissions concerning Webuild’s financial strength, the nature of cost of capital as a concept distinct from an interest rate, the absence of a legally recognized order of priority among the creditors of a State, and the practical consequences that, according to Argentina, enforcement proceedings would entail in the circumstances invoked by Webuild. The Committee likewise acknowledges Webuild’s submissions to the contrary, namely that the 6% post-award interest rate would not fully compensate Webuild for the financial and practical consequences of delay, having regard, in particular, to its asserted cost of capital, the costs and uncertainty inherent in enforcement proceedings, and the possible competing claims of other creditors.
77. The question for the Committee under Article 52(5) of the ICSID Convention and Rule 54(4) of the Arbitration Rules is whether, even assuming that Webuild would suffer no prejudice beyond a temporary postponement of payment, the absence of such prejudice would constitute a circumstance requiring the continuation of the stay. The Committee considers that it would not. A finding that Webuild would suffer limited prejudice, or no prejudice other than a temporary delay, would show at most that the stay would impose only a limited burden on Webuild. It would not, without more, establish the existence of circumstances making the continuation of the stay necessary.
78. Accordingly, the Committee need not reach a conclusive determination as to whether the post-award interest rate fully compensates Webuild for the consequences of delay, whether Webuild’s cost of capital or Argentina’s borrowing costs constitute appropriate benchmarks for comparison, or what practical weight should be attributed to the enforcement-related considerations invoked by the Parties. Even if these issues were resolved in Argentina’s favour, their resolution could at most show that the stay affects Webuild to a lesser extent; it would not support the conclusion that the absence of prejudice to Webuild constitutes a circumstance making the continuation of the stay necessary. For the same reason, having determined that the absence of prejudice to Webuild does not, by
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itself, constitute a circumstance requiring the continuation of the stay, the Committee need not determine whether the prejudice alleged by Webuild has been established, since that issue would not alter the present conclusion.
a. Argentina
79. Argentina submits that enforcement of the Award during the annulment proceedings would cause it serious harm.63 Argentina argues that lifting the Award could impact a substantial portion of public expenditure allocated to essential government functions.64 It notes, for instance, that this amount corresponds to approximately 205.8% of the national budget for Complex Crime and Anti-Drug operations, more than three times the budget for the Justice Strengthening Program, and approximately 263.5% of the budget for programs addressing infectious diseases such as HIV and tuberculosis.65 In Argentina’s view, lifting the stay would deprive it of budgeted public funds earmarked for essential functions, causing harm that could not be remedied by a subsequent refund.66
80. Argentina further submits that it is currently operating under a 48-month Extended Fund Facility with the International Monetary Fund (“IMF”), under which the rebuilding of reserve buffers forms a central component of its macroeconomic stabilization programme.67 The IMF has itself noted that “sustained efforts continue to rebuild reserves buffers... critical to allow Argentina to better manage shocks”.68 Argentina therefore argues that lifting the stay in the context of its current financial constraints would limit its ability to meet the payment obligations under the Award at this time.69
81. Argentina also contends that there is a real and substantial risk that, if the stay is lifted and payment is made, third-party creditors unrelated to this proceeding could seek to attach
63 Argentina’s Request, ¶¶ 26-41; Argentina’s PHB, ¶¶ 1 and ¶¶ 24-34. ↩
64 Argentina’s Request, ¶ 26. ↩
65 Argentina’s Request, ¶ 28. ↩
66 Argentina’s Request, ¶ 29. ↩
67 Argentina’s Request, ¶¶ 30-33. ↩
68 Argentina’s Request, ¶ 31. ↩
69 Argentina’s Request, ¶ 33. ↩
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those funds.70 In this regard, Argentina recalls that annulment committees have recognized that “difficulty, in the event that the award is annulled, of recoupment of amounts paid under the award [...] may be a factor militating in favour of a stay”.71
82. Argentina further refers to recent developments in Petersen Energía Inversora et al. and Eton Park Capital Management et al. v. Argentine Republic (“Petersen”), which, in its view, illustrate the significant practical difficulties associated with defending and recovering costs incurred in foreign enforcement proceedings.72 Argentina explains that, notwithstanding that the relevant U.S. district court judgment was under appeal and has since been reversed, claimants initiated recognition and enforcement proceedings in multiple jurisdictions, requiring Argentina to incur substantial defence costs across those jurisdictions. Argentina submits that, despite its subsequent success on appeal, it has been unable to recover those costs and, in certain jurisdictions, proceedings remain pending.73
83. Argentina therefore argues that any recoupment of funds transferred to Webuild would face significant practical obstacles and would likely require further litigation in foreign jurisdictions, rendering the harm effectively irreversible.74 Based on Dan Cake v. Hungary, Argentina notes that even in the case of a financially capable company, the recoupment of funds paid pursuant to an award may result in difficulties and require further litigation and enforcement proceedings in foreign jurisdictions, a consideration that weighs in favour of continuing the stay.75
70 Argentina’s Request, ¶¶ 34-40. ↩
71 Argentina’s Request, ¶ 36 (referring to AL RA 432, Enron Corporation & Ponderosa Assets, L.P. v. Argentine Republic, ICSID Case No. ARB/01/3, Decision on the Argentine Republic’s Request for a Continued Stay of Enforcement of the Award, 7 October 2008, ¶ 50, and other ICSID proceedings at footnote 49). ↩
72 Argentina’s Request, ¶¶ 38-40. See also, Argentina’s PHB, ¶¶ 25-27 (Argentina further submits that Webuild’s stated intention to pursue enforcement proceedings in multiple jurisdictions signals an intention to initiate such proceedings for improper purposes. In this regard, Argentina points to the Petersen litigation as an illustration of how enforcement campaigns by litigation funders are used to apply pressure and create friction, not to collect assets). ↩
74 Argentina’s Request, ¶¶ 38-40. ↩
75 Argentina’s PHB, ¶¶ 33-34 (referring to AL RA 472, Dan Cake S.A. v. Hungary, ICSID Case No. ARB/12/9, Decision on Stay of Enforcement, 25 December 2018, ¶ 62). ↩
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84. Finally, Argentina relies on Caratube v. Kazakhstan (II) to argue that a party need not demonstrate catastrophic harm to justify a stay,76 and that this risk is not mitigated by Webuild’s financial solvency, as attachment risk operates independently of the claimant’s ability to repay.77 Argentina submits that this risk must be weighed against the absence of cognizable prejudice to Webuild, which, as noted above, would suffer no harm beyond the ordinary delay inherent in the ICSID annulment system.78
b. Webuild
85. Webuild contests Argentina’s claims of financial hardship and submits that lifting the stay would not compel immediate payment but would merely allow it to pursue enforcement proceedings.79 Webuild argues that Argentina already carries the legal obligation to pay the Award, and that lifting the stay adds nothing to that obligation in terms of immediate budgetary impact.80
86. In any event, Webuild submits that Argentina has the financial capacity to satisfy the Award or provide security, referring to its fiscal position, access to capital markets, and foreign currency reserves. In Webuild’s view, “lifting the stay of enforcement will not deprive the Argentine Republic of funds necessary to implement public policies”.81
87. Webuild further submits that Argentina’s macroeconomic policy arguments are misplaced. Argentina’s 48-month Extended Fund Facility with the IMF would have nothing to do with paying the Award. Argentina’s claims of financial incapacity are therefore contrary to its own public record.82
88. Finally, Webuild argues that Argentina’s concerns regarding recoupment are unfounded. It argues that Webuild is a financially robust entity capable of repaying any amounts
76 Argentina’s Request, ¶ 27 (referring to AL RA 463, Caratube International Oil Company LLP and Devincci Salah Hourani v. Republic of Kazakhstan (II), ICSID Case No. ARB/13/13, Decision on the Stay of Enforcement of the Award, 12 December 2019, ¶ 96). ↩
77 Argentina’s Request, ¶¶ 34 and 37. ↩
78 Argentina’s Request, ¶ 41. ↩
79 Webuild’s Response, ¶¶ 18-20, 58. ↩
80 Webuild’s Response, ¶¶ 18 and 57; Webuild PHB, ¶¶ 3 and 12-18. ↩
81 Webuild’s Response, ¶ 60. ↩
82 Webuild’s Response, ¶¶ 59-60; and 19-20. ↩
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received in the event of annulment.83 As for the risk of third-party attachment, Webuild submits that this is a matter for enforcement courts — not for this Committee — and cannot serve as a shield for a State with a documented history of defaulting on its international obligations.84
c. The Committee’s Evaluation
89. The Committee considers that the question before it is whether Argentina has established circumstances demonstrating a concrete prejudice to it of such a nature and magnitude as to make the continuation of the stay necessary in the circumstances of the case. As illustrated by the decision in SolEs Badajoz v. Spain, this adverse consequence must be “a real one, and not simply an abstract possibility that is ‘common to virtually all annulment applications’”.85
90. At the same time, the Committee agrees with Argentina, when citing Caratube v. Kazakhstan (II), that neither Article 52(5) nor any other provision of the ICSID Convention imposes an independent requirement that the harm be “catastrophic or irreparable”.86 The question remains whether the circumstances invoked by Argentina establish such a real and case-specific risk of prejudice that make the continuation of the stay necessary.
91. The Committee has carefully considered the Parties’ respective submissions concerning the prejudice that Argentina alleges it would suffer if the stay were lifted. Argentina relies, in particular, on the potential effect of enforcement on public resources allocated to essential functions, its objectives of reserve accumulation and macroeconomic stabilization, the difficulties that it submits may arise in recouping amounts paid should the Award subsequently be annulled, including as a result of attachments sought by third-party creditors unrelated to this proceeding, and the costs and practical burdens that may arise in connection with enforcement proceedings in foreign jurisdictions. Webuild, for its part,
83 Webuild’s Response, ¶¶ 18-21, 63-64; Webuild PHB, ¶ 3. ↩
84 Webuild’s Response, ¶¶ 65-66. ↩
85 AL RA 482, SolEs Badajoz GmbH v. Kingdom of Spain, ICSID Case No. ARB/15/38, Decision on the Continuation of the Stay of Enforcement of the Award, ¶ 60. ↩
86 AL RA 463, Caratube International Oil Company LLP and Devincci Salah Hourani v. Republic of Kazakhstan (II), ICSID Case No. ARB/13/13, Decision on the Stay of Enforcement of the Award, 12 December 2019, ¶ 96. ↩
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submits that lifting the stay would not compel immediate payment, but would merely allow it to commence enforcement proceedings; that Argentina has the financial capacity to satisfy the Award or provide security; and that Webuild’s financial strength eliminates any material risk of non-recoupment.
92. Applying the standard, the Committee is not persuaded that Argentina has established that lifting the stay would expose it to a concrete and case-specific risk of prejudice of such a nature and magnitude as to make the continuation of the stay necessary. As to the prejudice that Argentina alleges it would suffer in relation to public resources and its macroeconomic objectives, Argentina’s submissions and supporting materials may explain why a continued stay would be financially advantageous and afford Argentina a measure of temporary budgetary flexibility. They do not, however, establish that the possibility of enforcement of the Award during the annulment proceeding would produce a prejudice of the nature required. In particular, Argentina has not identified the mechanism by which the possibility of enforcement would affect the execution of its 2026 budget, including any specific budgeted expenditure that would be displaced or any budgetary measure that it would be required to adopt. Nor has Argentina established that lifting the stay would materially impair its ability to pursue the macroeconomic or fiscal objectives on which it relies. In this connection, Argentina has not shown that the payment of the Award, or the possibility of its enforcement during the annulment proceeding, would compromise compliance with any requirement, performance criterion, or disbursement condition under the IMF-supported programme.
93. Argentina submits that lifting the stay, in the context of its financial constraints, would limit its ability to meet its payment obligations under the Award “at this time”.87 The Committee recognizes that a continued stay may afford Argentina temporary financial and practical flexibility in relation to the Award. That is an ordinary consequence of a stay. It cannot, without more, however, establish a circumstance that makes the continuation of the stay necessary. Accordingly, absent a demonstration of a concrete, case-specific and time-sensitive prejudice, financial difficulty or practical inconvenience in complying with the
87 Argentina’s Request, ¶ 33. ↩
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Award at this stage cannot constitute a circumstance requiring the continuation of the stay under Article 52(5) of the ICSID Convention.
94. The Committee likewise does not consider Argentina’s concerns regarding the recoupment of amounts paid and third-party attachments to be legally irrelevant. Webuild’s financial strength is not in dispute. Argentina nevertheless maintains that such strength does not eliminate the practical difficulties that may arise in connection with recoupment or the possibility that third-party creditors may attach Argentina’s right to recover amounts paid under the Award. The Committee accepts that a concrete risk that sums received pursuant to an award subsequently annulled could not be recovered may, in appropriate circumstances, be relevant to the assessment under Article 52(5). At the same time, the fact that recoupment may require additional proceedings, generate costs, or entail practical difficulties is a consequence that may arise from the structure of the ICSID system itself, in which an award may be enforced before the annulment proceeding has been completed. Such considerations do not, in and of themselves, make a stay necessary. Otherwise, the mere possibility that difficulties might arise in recovering amounts paid following a possible annulment would suffice to justify a stay as a general matter in annulment proceedings, a result that would be inconsistent with the discretionary nature of the power provided for in Article 52(5). Argentina’s concerns further depend on a sequence of future events, including the commencement and potential success of enforcement proceedings, Webuild’s receipt of amounts under the Award, the possible subsequent annulment of the Award, and the actual attachment or other circumstance rendering unavailable the amounts that Argentina would seek to recover. The Committee need not determine whether a third party could ultimately obtain an attachment of Argentina’s right to recover such amounts. These contingent possibilities, even though they cannot be excluded, do not demonstrate, whether considered individually or together with the broader financial concerns invoked by Argentina, that the continuation of the stay is required in the circumstances of this case.
95. The same applies to Argentina’s reliance on developments in the Petersen case. Those developments may illustrate that proceedings in foreign jurisdictions can, in certain circumstances, entail substantial costs, procedural complexity, and difficulties in bringing enforcement efforts to an end, even where the underlying decision is subsequently
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reversed. They do not, however, demonstrate that comparable proceedings will arise in the present case, or that the possibility that they might arise makes the continuation of the stay necessary. Accordingly, the Committee need not determine whether Webuild would seek enforcement in any particular jurisdiction, what measures Argentina might take in response, or what costs either Party might incur in such proceedings.
96. Accordingly, the Committee concludes that the circumstances invoked by Argentina in relation to the prejudice that it alleges it would suffer if the stay were lifted do not, whether individually or cumulatively, require the continuation of the stay. This conclusion does not rest on a finding that Argentina’s concerns are irrelevant, nor on an acceptance of Webuild’s competing submissions regarding Argentina’s resources, ability to pay, or potential exposure to enforcement proceedings. Rather, it rests on the distinct conclusion that the matters invoked by Argentina do not establish why the continuation of the stay is necessary within the meaning of Article 52(5) of the ICSID Convention and Rule 54(4) of the Arbitration Rules.
97. The Committee has considered the Parties’ submissions concerning Argentina’s legal framework and practice in relation to compliance with ICSID awards, the consequences that a continued stay may have for Webuild, and the consequences that lifting the stay may have for Argentina. For the reasons set out above, the Committee considers that none of those circumstances, whether considered individually or cumulatively, requires the continuation of the stay.
98. Accordingly, pursuant to Article 52(5) of the ICSID Convention and Rule 54(4) of the Arbitration Rules, the Committee concludes that the circumstances of the present case do not require the continuation of the stay of enforcement of the Award.
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99. Regarding the provision of a security, Argentina argues that the ICSID Convention does not empower ad hoc committees to require security as a condition for a stay of enforcement.88
100. Argentina submits that the ICSID Convention contains no such requirement, and that the case Azurix v. Argentina confirms that committees lack authority to condition a stay on the provision of a guarantee or other form of security.89
101. According to Argentina, imposing such a condition would effectively penalize it for exercising the right to seek annulment under Article 52 of the ICSID Convention, placing the claimant in a more advantageous position than that it enjoyed prior to the provisional stay.90 Argentina refers to cases such Pey Casado v. Chile and RREEF v. Spain, in which the committees observed that requiring security would unduly provide an advantage to the claimant vis-à-vis other creditors, and would impose an unnecessary burden on the applicant.91
102. Argentina further argues that conditioning the stay on the provision of financial security would expose it to a significant risk of attachment by third-party creditors. It refers to a memorandum prepared by the law firm Sullivan & Cromwell, according to which any reversionary interest in funds posted as collateral—or in amounts paid to Webuild and
88 Argentina’s Request, Section IV; Argentina’s PHB, Section III. ↩
89 Argentina’s Request, ¶ 42 (referring to AL RA 429, Azurix Corp. v. The Argentine Republic, ICSID Case No. ARB/01/12, Decision on the Argentine Republic’s Request for a Continued Stay of Enforcement of the Award, 28 December 2007, ¶ 33). ↩
90 Argentina’s Request, ¶¶ 48-55 (referring to AL RA 447, Víctor Pey Casado and Fundación Presidente Allende v. Republic of Chile, ICSID Case No. ARB/98/2, Decision on the Application of the Republic of Chile for a Stay of Enforcement of the Award, 5 May 2010 “to require such a guarantee would [...] place [the Claimant] in a much more favourable position than it enjoyed prior to the provisional stay,” at ¶ 34). ↩
91 Argentina’s Request, ¶ 42 (referring to AL RA 429, Azurix Corp. v. The Argentine Republic, ICSID Case No. ARB/01/12, Decision on the Argentine Republic’s Request for a Continued Stay of Enforcement of the Award, 28 December 2007, ¶ 33). ↩
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subject to repayment upon annulment—would be vulnerable to attachment under the applicable law, including the law of New York if appropriate.92
103. Argentina also disputes that a settled line of authority supports conditioning the stay on the provision of a security. It observes that in one of the four decisions on which Webuild relies, Occidental v. Ecuador, the committee continued the stay unconditionally and considered that conditioning a stay on the posting of security would place the award creditor in a better position than before the annulment application.93
104. In response to Webuild’s reliance on the Palladian case, Argentina responds that the stay of execution there was granted unconditionally. According to Argentina, the security was not a condition of the stay, but rather of the grant of permission to appeal—a procedural requirement for which there is no equivalent in the ICSID system—and was limited to approximately 20% of the amount ordered to be paid. Argentina further submits that the case illustrates the burden associated with providing security because it was unable to recover either the costs incurred in posting the security or the collateral funds provided in connection with it.94
105. Argentina further submits, relying on MINE v. Guinea and Enron v. Argentina, that a requirement to provide security could entail substantial costs, including bank-guarantee fees, and may require the freezing of amounts corresponding to the Award and accruing interest. In Argentina’s view, those consequences would not be justified.95
106. Argentina further argues that requiring security would risk discrimination against developing States, which may face greater practical and financial burdens in obtaining guarantees, thereby undermining confidence in the ICSID system.96 It further contends that
92 Argentina’s Request, ¶ 56. ↩
93 Argentina’s Request, ¶ 48. ↩
96 Argentina’s Request, ¶ 52. ↩
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such a condition would, in effect, circumvent the protection of sovereign immunity from execution, a principle recognized under international law.97
107. In light of the foregoing, Argentina requests the Committee to reject Webuild’s request for security and to continue the stay of enforcement unconditionally for the duration of the annulment proceedings.98
108. With respect to security, Webuild submits that the Committee has the authority to condition a stay on the provision of adequate financial security pursuant to Article 52(5) of the ICSID Convention.99
109. Webuild argues that requiring security would constitute a proportionate exercise of the Committee’s power to condition a continued stay, in light of what it characterizes as Argentina’s record of non-compliance and the need to counterbalance the prejudice caused to the award creditor. In support of its submission that Argentina has the capacity to provide such security, Webuild relies on the Palladian litigation, in which Argentina provided security of approximately EUR 310 million in connection with its appeal before the English courts.100
110. As to the form of security, Webuild proposes that it be provided by means of a standby letter of credit, an escrow deposit, or a pledge of assets.101
111. In conclusion, Webuild submits that it would not oppose the continuation of the stay provided that Argentina posts adequate financial security within 30 days of the
97 Argentina’s Request, ¶ 52. ↩
98 Argentina’s Request, ¶ 59; Argentina’s PHB, ¶ 43. ↩
99 Webuild’s Response, ¶¶ 68-70 (referring to CL-285, Standard Chartered Bank (Hong Kong) Limited v. Tanzania Electric Supply Company Limited, ICSID Case No. ARB/10/20, Decision on Applicant’s Request for a Continued Stay on Enforcement of the Award dated 12 April 2017, ¶¶ 75-85). ↩
100 Webuild’s Response, ¶¶ 73-77. ↩
101 Webuild’s Response, ¶¶ 24, 73, 77-79. ↩
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Committee’s decision. Should Argentina fail to provide such security within that period, Webuild requests that the stay be lifted.102
112. In light of its conclusion that the circumstances of the present case do not require the continuation of the stay, the Committee need not address the Parties’ respective submissions concerning the Committee’s authority to order security, whether the provision of security would be appropriate, or the form and amount of any such security. As the Committee has decided not to continue the stay, there is no stay whose continuation could be made conditional upon the provision of security.
113. Webuild requests that all the costs incurred in connection with this phase of the proceedings, together with interest until payment, be borne by Argentina.103
114. The Committee considers that it is not necessary to decide on the allocation of costs at this stage. It therefore reserves its decision on the costs incurred in connection with the present request for the continuation of the stay of enforcement for its final decision in the annulment proceeding.
102 Webuild’s Response, ¶¶ 23, 80. ↩
103 Webuild’s Response, ¶ 81. ↩
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115. For the reasons set forth above, the ad hoc Committee:
|
Signature Alexis Mourre Member of the ad hoc Committee |
Signature Carita Wallgren-Lindholm Member of the ad hoc Committee |
Signature
Fernando Piérola Castro
President of the ad hoc Committee