Compañiá de Aguas del Aconquija S.A. and Vivendi Universal S.A. v. Argentine Republic
ICSID · Investment (ICSID and treaty) · Argentina · 21 Nov 2000
Why it matters
This is a landmark ICSID case that established the 'fork-in-the-road' principle and the distinction between contract claims and treaty claims. It clarified that an investor must exhaust local remedies for contract breaches before bringing treaty claims, and that state responsibility for provincial acts requires attribution under international law. The case set important precedents for the relationship between investment treaties and domestic contracts.
Summary
The dispute arose from a 1995 Concession Contract between French company Compagnie Générale des Eaux (CGE) and its Argentine affiliate with the Province of Tucumán for water and sewage services. The contract contained an exclusive forum-selection clause (Article 16.4) requiring disputes to be resolved in Tucumán's administrative courts. CGE claimed that Tucumán authorities took actions that violated the Argentina-France BIT, including reducing tariffs and failing to adjust rates, and that Argentina was responsible for these acts. Argentina objected to ICSID jurisdiction, arguing that the contract's forum clause precluded arbitration. The Tribunal joined jurisdiction to the merits. It held that it had jurisdiction over BIT claims but that CGE was required to first pursue contract claims in Tucumán courts. Since CGE did not do so, most claims were dismissed. For claims of sovereign acts independent of the contract, the Tribunal found insufficient evidence of Argentina's responsibility. The Tribunal dismissed all claims and ordered each party to bear its own costs.
The detail
Parties: Compañiá de Aguas del Aconquija S.A. and Vivendi Universal S.A. v. Argentine Republic
Case number: ICSID Case No. ARB/97/3
Outcome: The Tribunal dismissed all claims by the Claimants against the Argentine Republic.
Applicable law: Argentina-France BIT (1991); ICSID Convention; Concession Contract with Tucumán province
Issues in play: The case involved the collision between a forum-selection clause in a concession contract (exclusive jurisdiction of Tucumán administrative courts) and the investor's right under the BIT to submit disputes to ICSID arbitration. The Tribunal held that claims based on contract breaches must first be pursued in local courts, while BIT claims could proceed but failed on evidence.
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