Italian contractor in line for $147m payout from Argentina after decade-long dispute

The case relates to the 60km Rosario-Victoria highway link project, which includes a 608m-long cable-stayed bridge over Paraná River. The highway was completed in 2004 and a concession for Webuild to operate the toll road was terminated in 2014.

Webuild originally had a 25-year concession agreement, signed in 1998, for the road, as part of Argentina’s privatization reforms aimed at attracting foreign investment.

But the Italian construction company said the project faced “significant challenges”, including delayed payments, the collapse of a financing agreement with the Inter-American Development Bank, and the introduction of the Emergency Law in 2002 during Argentina’s economic crisis.

The law decoupled the Argentine peso from the US dollar, converted public contracts originally signed in dollars into pesos, and froze toll rates. This “severely impacted” the financial sustainability of the concession, according to Webuild.

In 2015, it lodged a dispute against the Argentine Republic with the International Centre for Settlement of Investment Disputes (ICSID), which is part of the World Bank Group.

After a decade-long arbitration, which at one point was suspended following the death of one of the original arbitrators, the ICSID tribunal has finally determined that Argentina should pay compensation to Webuild. The award came after an initial decision in favour of the company in 2023 and a subsequent appeal by Argentina.

The arbitration court found that Argentina failed to restore the economic balance of the contract after the end of Argentina’s financial crisis and that this failure was in violation of Argentine law, the concession contract, and the Bilateral Investment Treaty between Italy and Argentina.