Webuild S.P.A. v. Argentine Republic

CourtDistrict Court, District of Columbia
DecidedNovember 19, 2024
DocketCivil Action No. 2021-2464
StatusPublished

This text of Webuild S.P.A. v. Argentine Republic (Webuild S.P.A. v. Argentine Republic) is published on Counsel Stack Legal Research, covering District Court, District of Columbia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Webuild S.P.A. v. Argentine Republic, (D.D.C. 2024).

Opinion

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA ____________________________________ ) WEBUILD S.P.A., ) ) Plaintiff, ) ) v. ) Civil Action No. 21-2464 (RBW) ) ARGENTINE REPUBLIC, ) ) Defendant. ) )

MEMORANDUM OPINION

The plaintiff, Webuild S.p.A., formerly known as Impreglio S.p.A., brings this civil

action against the defendant, the Argentine Republic, pursuant to the Investment Disputes Act,

22 U.S.C. § 1650a, seeking recognition and enforcement of an arbitral award issued in favor of

the plaintiff and against the defendant by an international tribunal following proceedings in

accordance with the Convention on the Settlement of Investment Disputes between States and

Nationals of Other States (the “ICSID Convention”). See Complaint (“Compl.”) ¶ 1, ECF No. 1.

Currently pending before the Court is the defendant’s motion to dismiss pursuant to Federal Rule

of Civil Procedure 12(b)(6). See Motion to Dismiss (“Def.’s Mot.” or the “defendant’s motion”)

at 1, ECF No. 9. Upon careful consideration of the parties’ submissions, 1 the Court concludes

for the following reasons that it must deny the defendant’s motion.

1 In addition to the filings already identified, the Court considered the following submissions in rendering its decision: (1) the Plaintiff’s Opposition to Defendant’s Motion to Dismiss (“Pl.’s Opp’n”), ECF No. 10; (2) the defendant’s Reply Memorandum of Law of the Republic of Argentina in Further Support of its Motion to Dismiss (“Def.’s Reply”), ECF No. 11; (3) the Plaintiff’s Notice of Supplemental Authority (“Pl.’s First Notice of Suppl. Authority”), ECF No. 12; (4) the defendant’s Response to Notice of Supplemental Authority (“Def.’s Resp. to Pl.’s First Notice of Suppl. Authority”), ECF No. 13; (5) the Plaintiff’s Notice of Supplemental Authority (“Pl.’s 2d Notice of Suppl. Authority”), ECF No. 14; and (6) the defendant’s Response to Notice of Supplemental Authority (“Def.’s Resp. to Pl.’s 2d Notice of Suppl. Authority”), ECF No. 15. I. BACKGROUND

A. Factual Background

In October 1999, the plaintiff, “a corporation organized under the laws of Italy,” Compl.

¶ 2, “as part of a consortium with other international companies, was awarded a water and

sewage service concession in a certain area within the Province of Buenos Aires[,]” id. ¶ 7.

“[The p]laintiff and its partners thereafter formed and funded [ ] an Argentinian [c]ompany[,]”

which executed a contract in December 1999 with the defendant “to provide water and sewage

services to an area within [Buenos Aires].” Id. Beginning in 2001, the plaintiff “fac[ed]

considerable difficulty in obtaining payments for its services from customers[,]” id. ¶ 10, due to

the “severe economic crisis in Argentina at the time[,]” id. ¶ 12. Then, “throughout 2002[,]” the

defendant “‘pesified’[2] utilities contracts . . . at parity level and froze tariffs; prevented [the

plaintiff] from billing work charges; and suspended [the plaintiff’s] right to interrupt water

service to customers who had not paid their bills.” Id. ¶ 13. And, “in July 2006, [the defendant

entirely] terminated the [contract.]” Id. ¶ 15.

“The relationship . . . between [the p]laintiff and [the defendant] is governed by the

Agreement between the Argentine Republic and the Italian Republic on the Promotion and

Protection of Investments[,]” id. ¶ 16, a bilateral investment treaty in which both the Argentine

Republic and the Italian Republic agreed, inter alia, to “accord[] fair and equitable treatment[,]”

id. ¶ 18, to “[i]nvestments made by investors of each [c]ontracting [p]arty[,]” id. (first alteration

in original), and to “refer[] to international arbitration[,]” id. ¶ 23, any disputes regarding

investments that “[cannot] be settled through friendly consultation between the parties to the

dispute[,]” id., or resolved by “the competent judicial or administrative courts of the [p]arty in

2 “Contracts are ‘pesified’ when the Argentinian peso has been unpegged from the [United States] dollar, thereby rendering them much cheaper.” Id. ¶ 13 n.17.

2 whose territory the investment is made[,]” id. The Argentine Republic and the Italian Republic

further agreed to treat awards issued following such arbitral proceedings as “final and binding”

and to “comply with any such award in accordance with [ ] domestic laws and the relevant

international conventions in force in both [c]ontracting [p]arties[.]” Id. Under this bilateral

investment treaty, “[w]here [a] dispute is submitted to international arbitration, the investor may

choose to refer the dispute [ ] to [ ] [t]he International Centre for the Settlement of Investment

Disputes ([‘]ICSID[’])[.]” Id. (fifth alteration in original). In 2007, in accordance with these

provisions, “[the p]laintiff submitted its claims [that the defendant breached the bilateral

investment treaty] to arbitration under the ICSID Convention[.]” Id. ¶ 25.

An “arbitration proceeded in accordance with the ICSID Convention and ICSID

[a]rbitration [r]ules.” Id. ¶ 28. “[O]n June 21, 2011[,]” id. ¶ 31, an ICSID tribunal “found

that . . . [the defendant] failed to treat [the p]laintiff’s investment in a fair and equitable

manner[,]” id. ¶ 33, and issued an award in favor of the plaintiff, see id. ¶ 31. “As compensation

for [the defendant’s] breaches of the [t]reaty, the [t]ribunal awarded [the p]laintiff [ ]

$21,294,000 [in United States currency] . . . before interest[,]” as well as “post-award interest . . .

from July 11, 2006[,] until payment, at an annual rate of 6%.” Id. ¶ 34. “On October 19, 2011,

[the defendant] filed an application requesting annulment and stay of enforcement of the award.”

Id. ¶ 35. Following a hearing held in 2013 before an ad hoc committee, on January 24, 2014, the

committee “unanimously decided to dismiss the entirety of the application for annulment,

declare the stay terminated, and order that each [p]arty bear its own legal costs and expenses[.]”

Id. Consequently, “the ICSID award became final with no further avenues of appeal.” Id.

“Despite [the plaintiff’s] demands for payment and efforts to negotiate payment from [the

defendant]” for at least two years, id. ¶ 45, “[t]he ICSID [a]ward remains unpaid[,]” id. ¶ 36.

3 B. Procedural History

The plaintiff filed its Complaint on September 20, 2021, see id. at 1, requesting that the

Court, inter alia, enter an order and judgment: (1) “[r]ecognizing the ICSID [a]ward and

enforcing the pecuniary obligations imposed by the ICSID [a]ward as if the ICSID [a]ward were

a final judgment of a court of general jurisdiction of one of the several States;” and (2)

“[e]ntering judgment in [the p]laintiff’s favor in the amounts specified in the [a]ward[,]” id. ¶ 46.

On August 8, 2022, the defendant filed its motion to dismiss pursuant to Federal Rule of Civil

Procedure 12(b)(6). See Def.’s Mot. at 1. The plaintiff then filed its opposition to the

defendant’s motion on August 22, 2022, see Plaintiff’s Opposition to Defendant’s Motion to

Dismiss (“Pl.’s Opp’n”) at 1, ECF No. 10, and the defendant filed its reply on August 29, 2022,

see Reply Memorandum of Law of the Republic of Argentina in Further Support of its Motion to

Dismiss (“Def.’s Reply”) at 1, ECF No. 11.

II. STANDARD OF REVIEW

Under Federal Rule of Civil Procedure

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Webuild S.P.A. v. Argentine Republic, Counsel Stack Legal Research, https://law.counselstack.com/opinion/webuild-spa-v-argentine-republic-dcd-2024.