Urbaser S.A. and Consorcio de Aguas Bilbao Bizkaia, Bilbao Biskaia Ur Partzuergoa v. The Argentine Republic
ICSID · Investment (ICSID and treaty) · Argentina · 8 Dec 2016
Why it matters
Urbaser v. Argentina is a landmark investment treaty case because it upheld the possibility of a host state bringing a counterclaim against an investor for violation of international human rights obligations, specifically the human right to water. The Tribunal found that the investor could be held responsible for failing to provide adequate water services, even though the BIT primarily protects investors. This decision expands the scope of investor obligations and highlights the interplay between investment law and human rights.
Summary
The dispute arose from a water and sewage concession in the Province of Buenos Aires, Argentina, granted to Aguas de Gran Buenos Aires S.A. (AGBA), a company owned by Spanish investors Urbaser and CABB. The concession was awarded in 1999 following Argentina's privatization of water services. The investors claimed that Argentina violated the Argentina-Spain BIT through a series of measures, including emergency laws enacted during the 2001-2002 economic crisis, which froze tariffs and altered the regulatory framework. They alleged breaches of fair and equitable treatment, expropriation, and discriminatory measures. Argentina counterclaimed, arguing that the investors failed to meet their contractual obligations to expand water and sewage coverage, thereby violating the human right to water. The Tribunal, after a lengthy procedure, dismissed all of Claimants' claims. It found that Argentina's measures were justified by the state of necessity and that the investors had not proven that the measures were disproportionate or discriminatory. The Tribunal also dismissed Argentina's counterclaim, holding that while the human right to water could be relevant, the investors had not breached any specific obligation under the BIT or international law. The decision is notable for its detailed analysis of the fair and equitable treatment standard, the state of necessity defense, and the potential for human rights obligations to be invoked against investors.
The detail
Parties: Urbaser S.A. and Consorcio de Aguas Bilbao Bizkaia, Bilbao Biskaia Ur Partzuergoa v. The Argentine Republic
Case number: ICSID Case No. ARB/07/26
Outcome: The Tribunal dismissed all of Claimants' claims and also dismissed Respondent's counterclaim. Each party bore its own costs and half of the ICSID costs.
Applicable law: Argentina-Spain BIT (1991), ICSID Convention, international law, and Argentine law
Issues in play: The case involved the collision between the investor's rights under the BIT (fair and equitable treatment, expropriation) and Argentina's sovereign right to regulate in times of crisis, including the human right to water. The Tribunal also considered whether a counterclaim based on the investor's alleged failure to provide water services could be brought under the BIT.
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