An ICSID tribunal has found in favour of Argentina in Metalpar SA and Buen Aire SA v Argentine Republic, an investment treaty dispute brought by two Chilean investors under the Argentina-Chile bilateral investment treaty (BIT). This is Argentina's first successful investment dispute following numerous losses in similar cases.

The dispute involved credit contracts entered into by Metalpar, a vehicle frame manufacturer, and Buen Aire, a finance firm, with Metalpar Argentina and Loma Hermosa Investments. When the financial crisis hit Argentina in 2001, the government converted all US dollar contracts to Argentine pesos, a move that the Chilean investors claimed devalued their contracts by 300 per cent and amounted (amongst other alleged breaches) to an indirect expropriation.

Finding in Argentina's favour, the tribunal ruled that:

  1. the level of devaluation did not amount to an expropriation and, in fact, the companies in question were able to continue functioning successfully, the emergency measures taken by Argentina having proved beneficial to them after a short time;
  2. the Chilean companies, conscious of the history of the area, should have been aware of the risks of a financial crisis;
  3. unusually for BIT claims, there was no contractual arrangement with a State entity. The contracts affected by the pesificación were between Metalpar Chile and its own Argentinean subsidiary. As such they did not amount to an investment in Argentina protected by the BIT. Given that there was no direct commitment from the State to Metalpar, to find in Metalpar's favour would essentially have required the tribunal to analyse the causes of the crisis and to pass judgment on the government's general political and economic decisions.

At first glance, this award may be viewed as a turning point in Argentina's fortunes. However, the circumstances of the case were unusually favourable to Argentina. Moreover, the tribunal looked unfavourably upon the Chilean companies who decided against putting witnesses and experts forward for cross-examination.