Originially from: World Arbitration and Mediation Review (WAMR)

Argentine Law and the ICC Rules: A Comment on the Ecofisa Case
By Horacio A. Grigera Naón, Attorney, International Finance
Corporation; Member of the International Court of Arbitration of the
International Chamber of Commerce and of the London Court of
International Arbitration.
Editor’s Note: In the case of Peréz Companc S.A. and Bridas S.A. v.
Ecofisa S.A. and Petrofisa S.A., decided in December 1990, Argentina’s
National Commercial Court of Appeals held that Argentine courts have
sole jurisdiction to decide controversies over the contents of terms of
reference in an ICC arbitration involving Argentine parties, even if the
ICC International Court of Arbitration has previously approved the terms
of reference. The court also considered whether arbitrators may rule on
the validity of actions by the Argentine government.
For some time the author was part of the legal team advising Bridas
S.A. The opinions expressed in this article are his own and not necessarily
those of the International Finance Corporation.)
Origins of the Dispute
In 1978, Ecofisa S.A. and Petrofisa S. A. joined Bridas S.A. and Perez
Companc S.A. as partners in a joint venture to supply oil and gas
exploration and development services to the Argentine state oil company
(YPF) under contract 18852/77 (“the Contract”). In Argentina, oil and gas
contracts of this sort must be approved by presidential decree. Under the
joint venture agreement—which contained an ICC arbitration clause—
Bridas and Perez Companc promised to pay Ecofisa and Petrofisa an extra
amount if the invoicing for oil and gas produced in a certain area of the oil
field were to exceed certain figures.
In 1984, the Argentine President signed a decree terminating a number
of oil and gas contracts, including the Contract. Bridas and Perez
Companc were of the opinion that termination of the Contract released
them from making payments to Petrofisa and Ecofisa under the joint
venture agreement. Petrofisa and Ecofisa argued, on the contrary, that the
Contract had not been terminated, since Bridas, Perez Companc, and YPF
had entered into a new contract regarding the same oil field.
Petrofisa and Ecofisa viewed this new contract as simply a renegotiation
and therefore a “continuation” of the original contract. Consequently, they
argued, the payment obligations under the joint venture agreement
remained in force.
As a result, Ecofisa and Petrofisa (“the Plaintiffs”) started ICC arbitral
proceedings against Perez Companc and Bridas (“the Defendants”). All
the companies involved were based in Argentina and controlled by