Compass Lexecon Assists Tribunal in Finding $405 Million Award Related to Unfair Treatment of Investors in Buenos Aires Water Concession

Claimants in two matters retained Dr. Manuel A. Abdala and Professor Pablo T. Spiller to provide expert advice and testimony on the economic impact of several measures resulting in the total loss of their investments in Aguas Argentinas S.A., the Concessionaire for water distribution and waste water treatment services in the City of Buenos Aires, Argentina, serving a population of almost eight million people.

The dispute has its origin in early 2002 when Argentina refused to adjust Aguas Argentinas’ tariffs, contrary to contractual rights which called for tariff modifications following the alteration of the Argentine Peso-U.S. Dollar parity. Compass Lexecon experts assisted the Tribunal in providing an economic perspective as to how the concession contract should have been renegotiated and how tariffs should have been set, in the absence of Argentina’s breach. Compass Lexecon also helped the Tribunal establish that the environmental counterclaims raised by Respondent could not be attributed to the concessionaire since there was a lack of causality and the methodology did not withstand standard economic principles.

Over the course of the 12-year arbitration proceeding, Compass Lexecon’s experts submitted numerous reports and presented oral testimony in two hearings. The $405 million award granted Claimants compensation for losses on their equity stakes and on their contributions in the form of debt guarantees. In turn, claimant Suez was also granted damages due to lost management fees, which were deemed to be an integral part of the investments in the water concession.

Manuel Abdala and Pablo Spiller provided testimony on regulatory and quantum matters, and Mariana Conte Grand on environmental issues, all of them were assisted by a team led by Daniela Bambaci and Sebastian Zuccon. Other team members included Carla Chavich, Miguel Nakhle, and Erica Hoffmaster. Compass Lexecon worked with a legal team led by Nigel Blackaby, Noiana Marigo, and Lluis Paradell of Freshfields Bruckhaus Deringer LLP, Bernardo Iriberri of Richards Cardinal Tützer Zabala, Zaefferer SC, and Julio Durand of Cassagne Abogados.