Identifier
Created
Classification
Origin
09BUENOSAIRES846
2009-07-20 18:45:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Buenos Aires
Cable title:  

2009 REPORT ON INVESTMENT DISPUTES AND EXPROPRIATION

Tags:  EINV KIDE ECON PGOV PREL OPIC AR 
pdf how-to read a cable
VZCZCXYZ0026
RR RUEHWEB

DE RUEHBU #0846/01 2011845
ZNR UUUUU ZZH
R 201845Z JUL 09
FM AMEMBASSY BUENOS AIRES
TO RUEHC/SECSTATE WASHDC 4096
RUCPDOC/USDOC WASHINGTON DC
INFO RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUEHC/DEPT OF LABOR WASHINGTON DC
RHMFIUU/HQ USSOUTHCOM MIAMI FL
RUCNMER/MERCOSUR COLLECTIVE
UNCLAS BUENOS AIRES 000846 

SIPDIS
SENSITIVE

EEB/IFD/OIA FOR HGOETHERT, KBUTLER
L/CID FOR PPEARSALL
USDOC FOR 4322/ITA/MAC/OLAC/PEACHER
TREASURY FOR LUYEN TRAN, WILLIAM LINDQUIST

E.O. 12958: N/A
TAGS: EINV KIDE ECON PGOV PREL OPIC AR
SUBJECT: 2009 REPORT ON INVESTMENT DISPUTES AND EXPROPRIATION
CLAIMS: ARGENTINA

REF: SECSTATE 49477

UNCLAS BUENOS AIRES 000846

SIPDIS
SENSITIVE

EEB/IFD/OIA FOR HGOETHERT, KBUTLER
L/CID FOR PPEARSALL
USDOC FOR 4322/ITA/MAC/OLAC/PEACHER
TREASURY FOR LUYEN TRAN, WILLIAM LINDQUIST

E.O. 12958: N/A
TAGS: EINV KIDE ECON PGOV PREL OPIC AR
SUBJECT: 2009 REPORT ON INVESTMENT DISPUTES AND EXPROPRIATION
CLAIMS: ARGENTINA

REF: SECSTATE 49477


1. (SBU) The United States Government is aware of sixteen (16)
claims against the Government of Argentina (GOA),one of which was
resolved during 2007 but whose award has not been implemented by the
GOA yet (Claimant C),and two others that were resolved during 2008
and 2009 (Claimant I and Claimant K). The other 13 cases are still
active; five have resulted in awards for the claimants that are now
being challenged in annulment procedures. Many of these claims
arise in whole or in part from the GOA's implementation of Emergency
Law 25,561 on January 6, 2002. This law (among other things)
converted contract provisions denominated in US dollars into
Argentine pesos at a 1:1 rate (a process known as "pesification")
and rescinded previously-sanctioned indexation of contracts to US
inflation indices. US investors contend that such measures
unilaterally derogated contractual agreements and effectively
expropriated US investor capital. The two new claims result from
the 2008 confiscation of private pension funds and have not yet
resulted in formal arbitration claims.


2. (SBU) Many of these claims remain in arbitration proceedings
through the World Bank's International Centre for Settlement of
Investment Disputes (ICSID). Post does not advocate on behalf of
U.S. firms in judicial or arbitration cases while formal proceedings
are underway. Some ICSID cases that have been temporarily suspended
by mutual agreement of the parties are considered to be active under
the terms of the ICSID Convention. In cases where formal ICSID
proceedings have ended but the GOA has yet to fulfill the
requirements of the award (e.g., Claimant C),Embassy actively
advocates for prompt final resolution.


3. (SBU) a. Claimant A

b. 2002

c. Claimant A is a US energy sector utility with gas distribution
assets in Argentina. Its dollar-based gas distribution contracts in
Argentina were linked to the US Producer Price Index. In March

2002, Claimant A initiated consultations under ICSID, claiming that
various provisions of Emergency Law 25,561 voided its distribution
contracts and effectively expropriated its capital investment.
Claimant A also charged that the GOA had failed to pay contractually
mandated subsidy payments in compensation for pricing its gas at
below-market rates. Claimant A filed for ICSID arbitration on
September 10, 2002. Its request for arbitration was accepted on
December 6, 2002. On February 27, 2003, Claimant A's business
partner filed an arbitration claim under a bilateral investment
treaty between Luxembourg and Argentina. The two claims will be
treated jointly. The tribunal ruled against the GOA's objections to
its jurisdiction. Both parties filed post-hearing briefings on
April 3, 2006. In April 2007, the GOA and Claimant A's business
partner reached an agreement on tariff increases and domestic
investment, which included a settlement to suspend its portion of
the ICSID case, which it did. The tribunal closed proceedings on
Claimant A's case on July 19, 2007, and granted a final award to the
Claimant on September 28, 2007. The award established that the GOA
breached its obligations to accord the Claimant fair and equitable
treatment and to observe the obligations entered into with regard to
the investment under the US-Argentine Bilateral Investment Treaty.
The award directs the GOA to pay the Claimant compensation in the
amount of USD128.3 million and interest (compounded semiannually at
six-month LIBOR plus 2%, beginning on January 1, 2002 until the date
of the award). Under ICSID rules, the GOA registered an annulment
request January 30, 2008, and the request is now being considered by
an ad-hoc ICSID committee. On September 16, 2008, Claimant A filed
a request for the termination of the provisional stay of enforcement
of the award granted to the GOA, which resulted in a March 5, 2009
decision from the ad-hoc committee establishing that the stay of
enforcement would continue in effect for the duration of the
annulment proceedings. The stay was granted with the condition that
Argentina place in escrow USD 75 million which, including accrued
interest, would be collectible in its entirety by Claimant A in
partial discharge of Argentina's payment obligation under the award,
in the event that Argentina's application for annulment of the award
was completely rejected. If the application was partially accepted
by the Committee, Claimant A could collect the funds in escrow for
that portion of the Award which was not annulled. If Argentina
failed to place in escrow the sum required within 120 days from the
date of the decision, the Committee may - at the request of Claimant
A - order the termination of the stay of enforcement with or without
providing any opportunity for Argentina to make up for any
delinquent payment. On May 13, Claimant A filed a request for the


termination of the stay of enforcement of the award. Argentina did
not place in escrow the sum required before the July 3, 2009
deadline.


4. (SBU) a. Claimant B

b. 2001

c. Claimant B, a US energy sector firm, has a substantial minority
investment in an Argentine gas pipeline whose dollar-based
transmission contract was linked to the US producer price index.
Claimant B initiated preliminary consultations under ICSID
arbitration guidelines in September 2001 following a GOA decision to
cease approving index-related increases in gas transmission fees.
In May 2002, Claimant B began a process to expand its ICSID claim to
address certain provisions of Emergency Law 25,561. Claimant B
filed for ICSID arbitration on March 19, 2003. The tribunal issued
a ruling on jurisdiction in January 2004 in favor of Claimant B. On
May 22, 2007, the tribunal ruled against Argentina in this case,
awarding USD 106.2 million in damages. In addition to the
compensation award, the ICSID arbitral panel ruled that the GOA must
pay interest (at Libor plus 2%) for the period between January 2002
and the May 22, 2007 ruling. Claimant registered a request for
rectification on July 16, 2007, asking the tribunal to order the GOA
to continue paying interest on the amount awarded until full payment
is made. On October 25, 2007, the tribunal concluded that
post-award interest could not be awarded. On the award itself, the
GOA registered an annulment request on March 7, 2008. After the
annulment ad-hoc committee was constituted, on June 18, 2008,
Claimant B filed a request to terminate the provisional stay of
enforcement of the award, or alternatively, to condition a
continuation of the stay on Argentina's posting adequate security.
On October 7, 2008, the ad-hoc committee decided in favor of an
extension of the stay of enforcement, stating however that the
committee understood that it was Argentina's intention, in the event
that the award was not annulled, not to pay the Award but to require
the Claimant to bring proceedings for the enforcement of the Award
under the provisions of Argentine law that implement Article 54 of
the ICSID Convention. The committee therefore understood that
Argentina, in the event that the Award was not annulled, at that
time had the intention to engage in conduct that would amount to
non-compliance with its obligations under the BIT and Article 53(1)
of the ICSID Convention. The committee found Argentina's position
as to its obligations to pay on a final award to be incorrect,
although the committee accepted that Argentina had acted
consistently with its own good faith interpretation of the BIT and
the ICSID Convention, and regarded 60 days as sufficient time for
Argentina to reconsider its position on the extent of its
obligations to pay on the final award if annulment was refused in
this matter. The Committee indicated that after 60 days, it would
be prepared to reconsider the issue of continuance of the stay upon
the application of the Claimant. However, Argentina did not change
its position after the 60-day period, and the Claimant requested the
Committee to lift the provisional stay of enforcement of the award.
Nevertheless, the ad-hoc Committee on May 20, 2009 granted to
Argentina an extension of the provisional stay of enforcement of the
award. GOA officials told Embassy officials that this was the
Committee's response to Argentina's argument that any amount placed
in escrow would be very likely seized by Argentina's defaulted debt
bond-holders.


5. (SBU) a. Claimant C

b. 2000

c. Claimant C is a US energy sector infrastructure firm that
operates natural gas pipelines in Argentina through a local company
under a license granted to the local company by the GOA. The
Argentine gas legal framework and the local company's license linked
the tariffs for gas transmission services to the US producer price
index. On October 20, 2000, following a decision by the GOA to
cease approving index-related increases in gas transmission tariffs,
Claimant C initiated preliminary consultations with the GOA under
the US-Argentine Bilateral Investment Treaty. On July 24, 2001,
Claimant C filed for ICSID arbitration, claiming over USD100 million
in compensation. On January 6, 2002, the GOA passed Emergency Law
25,561, which abolished adjustments and indexation clauses in
contracts contained in licenses, and converted all
dollar-denominated tariffs into pesos at the mandatory rate of 1
peso per USD. On February 13, 2002, Claimant C wrote to the GOA,
saying these measures further affected Claimant C's property rights
and were tantamount to an expropriation. On July 5, 2002, Claimant

C submitted its memorial seeking USD 261.1 million in damages from
the GOA for expropriation of its investment. On May 12, 2005,
Claimant C received an award of USD 133.2 million from the ICSID
tribunal, with interest to date of payment, and granting the GOA a
right to purchase Claimant C's interest in its local affiliate for
an additional payment. On September 27, 2005, the GOA filed an
ICSID application to institute annulment proceedings. The ad-hoc
ICSID annulment committee on September 25, 2007 annulled one
sub-paragraph, but dismissed all other GOA claims, so most of the
award remains in force. The GOA declined to make any payment,
arguing that the ICSID award must be further adjudicated in domestic
courts. Claimant rejected this interpretation of ICSID regulations.
The period during which the GOA had the right to purchase
Claimant's C interests in its local affiliate expired on May 12,

2008. On June 5, 2008, Claimant informed Embassy that it had sold
both its interest in the local affiliate and its ICSID award to a
U.S. investment fund. This investment fund has informed Embassy
that it will continue efforts to collect this ICSID award from the
GOA. Following the September 25, 2007 conclusion of the ICSID
arbitration process, the Embassy has actively encouraged GOA
officials to fulfill Argentina's commitment to the Claimant under
the terms of the ICSID Convention.


6. (SBU) a. Claimant D

b. 2000

c. Claimant D is a diversified US energy sector firm with gas
transmission assets in Argentina whose dollar-based transmission
contract was linked to the US producer price index. In October
2000, following a GOA decision to no longer approve index-related
increases in gas transmission fees, Claimant D initiated preliminary
consultations under ICSID arbitration guidelines and formally filed
for ICSID arbitration in March 2001. In May 2002, Claimant D began
a process to expand its ICSID claim to include provisions of
Emergency Law 25,561. On April 30, 2004, the arbitral panel issued
its decision on jurisdiction, ruling in favor of Claimant D on all
jurisdictional issues. On October 3, 2006, the tribunal decided on
liability, based upon the GOA's assertion that provisions of
Emergency Law 25,561 were adopted pursuant to a "state of necessity"
that reflected the rights of the GOA to pursue "measures necessary
for the maintenance of public order...or the protection of its own
essential security interests" as recognized under Article XI of the
U.S. - Argentine Bilateral Investment Treaty. The tribunal
concluded that the GOA underwent a "state of necessity" starting
December 1, 2001 and ending April 26, 2003. The tribunal a)
dismissed the claim for expropriation of the investment; b) found
that Argentina breached the standard of fair and equitable
treatment, which was to provide no less favorable treatment than
that to be accorded under the international law, and adopted
discriminatory measures, causing damage to Claimant D; and c)
determined that the standard prohibiting the adoption of arbitrary
measures was not violated. The tribunal ruled that Argentina was
exempted from the payment of compensation for damages incurred
during the state of necessity; however, Argentina was liable for
damages outside that period. The tribunal rendered a USD 57.4
million plus interest award on July 25, 2007. On July 8, 2008, the
tribunal denied Claimant D's request for a supplementary decision to
increase the amount awarded. On September 19, 2008, Claimant D
applied for the annulment of the July 25, 2007 award. On December
24, 2008, Argentina applied for the partial annulment of the award.
The proceeding was suspended pursuant to the parties' agreement on
March 11, 2009 and the suspension was extended on June 12, 2009.


7. (SBU) a. Claimant E (First Claim)

b. 2001

c. Claimant E is a water resource management company that, through a
local subsidiary, won a 30-year concession in 1999 to manage a
significant share of Buenos Aires Province's water and wastewater
management facilities. Many of its tariff rights under the
Concession Contract were effectively repudiated by the Province when
the water in one city turned sour in April 2000 because of algae in
the local reservoir which was under the Province's exclusive
control. According to Claimant E, provincial officials blamed
Claimant E for the problems, refused to allow the company to bill
for its services, required the company to provide bottled water to
the town at the company's expense, and publicly announced that
people should not pay their water bills. The Province also
allegedly repudiated Claimant E's right to amortize its bid payment.
In January 2001, Claimant E filed for ICSID arbitration. Following


unsuccessful settlement efforts, an ICSID panel was constituted in
July 2001, and the case was formally accepted by the panel in
September 2001. While the arbitration case remained in process,
Claimant E filed for bankruptcy in December 2001 and returned
operation of all its water and wastewater management facilities to
provincial authorities in March 2002. The final hearing on the
merits was held in March 2005. In June 2006, the tribunal decided
that the respondent had failed to accord full protection and
security to the investment and that the respondent had breached the
U.S. - Argentine Bilateral Investment Treaty by taking arbitrary
measures that impaired the Claimant's use and enjoyment of its
investment. Therefore, it awarded compensation to Claimant E of USD
165.2 million. The Argentine Republic registered an ICSID annulment
proceeding on December 11, 2006 to contest the award, and an ad-hoc
Committee to consider the annulment request was constituted on June
14, 2007. On December 28, 2007, the ad-hoc ICSID annulment
committee unanimously decided that enforcement of the award should
be stayed pending the committee's decision on Argentina's
application for annulment and declined to order the provision of any
security during the period of the stay.


8. (SBU) a. Claimant E (Second Claim)

b. 2003

c. Claimant E held, through a local subsidiary, a concession to
manage a significant share of Mendoza Province's water and
wastewater management facilities. Claimant E filed for ICSID
arbitration in 2003, alleging that by interfering with Claimant E's
contractual rights, the province effectively repudiated its
concession. ICSID registered the claim on December 8, 2003. The
ICSID tribunal was constituted March 28, 2008 and it invited the
parties to file submissions on jurisdiction on June 2, 2009.


9. (SBU) a. Claimant F

b. 2002

c. Claimant F owns and operates several hydrocarbon and
hydroelectric power plants in Argentina, and has electricity
distribution concessions in the Province of Buenos Aires. In March
2002, Claimant F pursued informal negotiations claiming that the
pesification of its dollar-denominated distribution contracts and
the devaluation of the peso have resulted in the effective
expropriation of a large portion of the value of its investment. In
April 2005, one of Claimant F's subsidiaries signed a definitive
agreement on renegotiation of its concession agreement with the GOA.
The agreement was ratified by the Argentine Congress in May. As
part of that agreement, Claimant F agreed to suspend its claim, and
to definitively drop its claim if a tariff agreement were approved.
The parties requested the suspension of proceedings, which the
tribunal accepted on January 23, 2006. The tribunal has renewed the
suspension on several occasions, the last being December 15, 2008.
Portions of the proceedings referring to Claimant F's other two
distribution subsidiaries were discontinued after Claimant F reached
an agreement with the provincial government.


10. (SBU) a. Claimant G

b. 2001

c. Claimant G is an information systems provider that won a USD 37
million public bid contract to provide information services to the
judicial branch. The contract amount was payable in 36 equal
monthly installments beginning when the system was completed. Work
started in early 1998. Some 85 percent of the work had been
completed by November 1999, and the remaining 15 percent was
completed in December 2000. During work on the contract, Claimant G
agreed to do USD 30 million in additional information systems work
for the GOA. It also provided the GOA with USD 3.5 million in
postal machinery. In January 2001, the GOA began paying for the 85
percent work completed in November 1999, and in February 2001, on
the remaining 15 percent. In December 2001, the contract was
pesified (all dollar-denominated tariffs converted into pesos at the
rate of 1 peso per USD) by law. From January 2002 through April
2003, the GOA made no payments under the contract, even after it had
been pesified.

Claimant G filed notice of its intention to pursue ICSID arbitration
in October 2002. It held friendly consultations with the GOA in
February 2003 without success. ICSID formally registered Claimant
G's claim on October 15, 2003. The claim is based on allegations of


the pesification of the original contract, the refusal to recognize
the additional work done under the contract, and the non-payment
from February 2002 through April 2003. Total claim amount is
approximately USD 55 million. According to Claimant G, this does
not include a claim for the value of the postal machinery because
the GOA has recognized that debt and repeatedly promised to pay it.
Before an arbitral panel was constituted to hear the claim, the
parties signed an agreement in August 2005 to postpone the case and
jointly appointed accounting and technical experts to examine the
facts. The suspension of the case has since been extended several
times. On July 31, 2006, the accounting expert issued a report
establishing compensation for Claimant G in the range of ARP 21.6
million (USD 7 million) to ARP 38.4 million (USD 12.5 million).
Once the parties agree on this range, a technical expert will begin
its part of the analysis. These reports will be used as the basis
for final settlement negotiations. The ICSID tribunal confirmed the
suspension of the proceedings in April 2007 as negotiations
continue. However, Claimant G was notified on April 10, 2008, of a
resolution issued by a judiciary agency directing Claimant G to pay
a penalty of approximately USD 4.5 million plus interest charges,
dating back to the beginning of the contract (1998). Claimant G is
in active discussions with the GOA about the accounting expert's
findings, the pending technical report and the penalty. The Embassy
is supporting Claimant G's efforts to engage senior GOA officials to
speed the resolution of its claim.


11. (SBU) a. Claimant H

b. 2003

c. Claimant H owned an interest in electrical generating plants and
in an oil and gas company operating in Argentina. In January 2002,
Argentina pesified dollar-denominated oil and gas supply contracts,
imposed an oil export tax in alleged violation of decrees from 1992
that guaranteed export tax stability, and changed the electrical
generation regulatory and legal framework based on which the company
invested. Claimant H filed for ICSID arbitration in June 2003. On
April 27, 2006, an ICSID tribunal issued a decision on jurisdiction
in favor of Claimant H. The Claimant filed a reply on the merits
November 28, 2006 and parties filed answers to questions posed by
the tribunal during the hearing on the merits on August 2, 2007. An
ICSID tribunal decision on the merits remains pending.


12. (SBU) a. Claimant I - Resolved

b. 2003

c. Claimant I is a provider of leasing services in Argentina.
Claimant I's claim was registered with ICSID on February 27, 2004.
The claim asserted that various actions by the Government of
Argentina effectively expropriated the value of its investment. On
December 28, 2005, the GOA filed a memorial objecting on
jurisdiction grounds. On April 2, 2007, the tribunal rejected the
GOA's objections. The Tribunal issued an order taking note of the
discontinuance of the proceeding on May 12, 2009, so the case is now
concluded.


13. (SBU) a. Claimant J

b. 2003

c. Claimant J is an insurance company with operations in Argentina.
ICSID registered Claimant J's complaint on May 22, 2003. An
arbitration panel was selected, and had its first session on January
29, 2004. The tribunal found that it had jurisdiction over the
claim on February 22, 2006. The tribunal rendered an award on
September 5, 2008, which established that, except for Claimant J's
claim on how the restructuring of LETEs (a type of Treasury bill)
affected it, all other substantive claims were dismissed. Regarding
the claim relating to the LETEs, Argentina was found liable for
compensation of USD 2.8 million and compound interest thereon at at
six-month LIBOR plus 2% compounded annually from January 1, 2005
until payment. On October 16, ICSID registered a request for
rectification of the award by Claimant J, and on November 6, ICSID
registered another request for rectification from Argentina. The
tribunal decided on both requests on February 23, 2009. Most
notably, in this decision the tribunal assented to the rectification
request by Argentina to clarify that Argentina had not opposed the
possibility of the tribunal consulting with the USG on its own view
of some provisions contained in the US-Argentine Bilateral
Investment Treaty (BIT). This was because in the decision, the
tribunal had stated that neither Claimant J nor Argentina "wished


the tribunal to invite the U.S. to state its position formally for
the purposes of these arbitration proceedings, one way or the
other." Argentina pointed out in its rectification request that it
had not opposed such a consultation during the arbitral hearings -
even if Argentina had not gone so far as to request that the
tribunal consult the USG. In response to Argentina's rectification
request, the tribunal decided in its rectification decision to alter
the award's wording so as to make clear that neither party
"requested" that the tribunal consult with the USG on the
interpretation to be given to Article 11 of the BIT. On January 14,
ICSID registered an application for the annulment of the award
submitted by Claimant J, and on June 8, 2009, ICSID registered an
application for the partial annulment of the award, submitted by
Argentina.



14. (SBU) a. Claimant K - Resolved

b. 2003

c. Claimant K consists of two companies, an Argentine energy firm
and its largest foreign shareholder, which owned interests in
electrical generating plants and hydrocarbon development assets in
Argentina. In January 2002, Argentina pesified dollar-denominated
oil and gas supply contracts, imposed an oil export tax in alleged
violation of decrees from 1992 that guaranteed export tax stability,
and changed the electrical generation regulatory and legal framework
on which the company's investment was based. Claimant K filed two
claims with ICSID in June 2003, and the claims were heard jointly by
one arbitration panel. The panel held a hearing on jurisdiction in
March 2005. Meanwhile, the Province of Chubut Government
renegotiated its hydrocarbon exploration and development concession
contract with Claimant K. A provision of this concession extension
agreement required Claimant K to discontinue its ICSID claim. The
GOA attorney general's office announced that an agreement of the
parties had been reached and that Claimant K cancelled its case June
23, 2008. The ICSID Tribunal took official note of the
discontinuance order on August 20, 2008.


15. (SBU) a. Claimant L

b. 2004

c. Claimant L is an oil and gas exploration and development company.
Claimant L contends that its investment was effectively
expropriated following the 2002 pesification of its
dollar-denominated oil and gas supply contracts. Claimant L also
complains that the imposition of export taxes in 2002 violated the
decrees that were in force at the time of its investment. Claimant
L's claim was formally registered August 5, 2004. Claimant L filed
an ancillary claim to expand the case on February 14, 2006, and a
second such ancillary claim on October 23, 2007. Claimant L filed a
memorial on the merits on February 16, 2009. The GOA filed a
memorial on jurisdiction on May 14, 2009.


16. (SBU) a. Claimant M

b. 2005

c. Claimant M is an Argentina-based company with US and German
investors. It formally registered its claim with ICSID on June 23,

2005. Claimant M seeks USD 20 million from the GOA, claiming that a
local bank illegally canceled contracts in 2003, resulting in
expropriation of its funds. An arbitral panel was constituted on
March 27, 2006. The tribunal held its first session March 2, 2007.
Following a request by the parties, the tribunal suspended the
proceedings for the first time on July 18, 2007, with subsequent
extensions. Eventually, the case continued, and Claimant M filed a
memorial on the merits on January 15, 2009. The GOA filed a
memorial on jurisdiction on May 1, 2009.


17. (SBU) a. Claimant N

b. 2008

c. On October 21, 2008, with no advance warning, the GOA proposed
legislation to nationalize the AFJP (Argentine private pension
funds) management system. Argentina's Congress passed the law on
November 20, and it entered into effect December 9. The bill
affected two U.S. companies: Claimant N and Claimant O (see para
16). At the time of the nationalization, Claimant N had become the
largest AFJP in Argentina as measured by assets under management.


Both claimants N and O requested that the USG clarify to the GOA the
importance of ensuring that the nationalization process be fair and
properly executed. Specifically, they requested that the GOA grant
a clean and transparent transfer of AFJP client assets, that the GOA
grant proper compensation for the negative impact that AFJP
shareholders will suffer through this regulatory reform, and that
there be respectful treatment of AFJP executives and their corporate
brands throughout the process. Senior Embassy officials as well as
visiting USG officials and visiting Members of the U.S. Congress
have raised these points with various senior GOA officials. To
date, however, the GOA has not broached the subject of compensation
for the nationalization of AFJPs' business operations, and the five
affected foreign companies (including Claimant N and Claimant O) are
all reportedly considering whether to pursue international
arbitration via ICSID.


18. (SBU) a. Claimant O

b. 2008

c. Claimant O was a minority shareholder in an AFJP separate from
Claimant N's.


19. (SBU) Identification of Claimants

Claimant A: Sempra Energy International
Claimant B: Enron Creditors Recovery Corporation (formerly Enron
Corporation) as shareholder of TGS
Claimant C: CMS Gas Transmission Company
Claimant D: LG&E Energy Corporation, LG&E Capital Corporation and
LG&E International Inc.
Claimant E: Enron as shareholder of Azurix
Claimant F: AES Corporation
Claimant G: Unisys Corporation
Claimant H: El Paso Energy International Company
Claimant I: CIT Group Inc.
Claimant J: Continental Casualty Company
Claimant K: Pan American Energy LLC, BP Argentina Exploration
Company, and BP America Production Company
Claimant L: Mobil Exploration and Development Inc. Suc. Argentina
and Mobil Argentina S.A.
Claimant M: Asset Recovery Trust
Claimant N: Metropolitan Life
Claimant O: New York Life International LLC

KELLY