Panabee | 2 June 2025
AES wins landmark $733 million arbitration award against Argentina: the path to collection
- Summary
The AES Corporation, a global power generation and utility company, has secured a significant victory in a long-standing dispute with the Argentine Republic. On May 30, 2025, an arbitral tribunal of the International Centre for the Settlement of Investment Disputes (ICSID) ordered Argentina to pay AES approximately $733 million in damages, including costs and accrued interest. This substantial award stems from Argentina's breach of the US-Argentina bilateral investment treaty.
The tribunal found that measures taken by Argentina, beginning in late 2001, violated the treaty. These measures included dismantling the competitive, uniform remuneration system that was in place when AES initially invested, withholding receivables owed to AES's subsidiaries, and imposing government-run investment programs that forced AES's subsidiaries to reinvest those receivables into new power plants.
While the award is a positive development for AES, the path to collection remains uncertain. ICSID procedures allow for a 45-day period for either party to seek rectification or clarification and a 120-day period for either party to seek annulment of the award before a new panel. Should Argentina apply for annulment, the execution of the award would be stayed pending the constitution of the Annulment Panel, which would then rule on continuing the stay and the merits of the annulment application. AES has stated that it cannot provide assurance on whether Argentina will seek annulment, how an Annulment Panel would rule, or the timing or success of any enforcement measures through judicial means. The company may also attempt to settle the dispute, though without any assurances on the likelihood or timing of such a settlement.
