ICS Inspection and Control Services Ltd (UK) v. Argentina, Award on Jurisdiction, PCA Case No. 2010-9 (February 10, 2012)
C. SHORT IDENTIFICATION OF THE CASE
1. The following quotation from the Claimant’s Statement of Claim summarises the main aspects of the dispute:
5. [...] In summary, the dispute relates to the treatment accorded to ICS by Argentina in connection with the agreement entered into by ICS and the Ministerio de Economía y Obras y Servicios Públicos (“MECON”) on March 11, 1998 relating to the provision of auditing services (the “Contract”).
6. On May 22, 1997, through Presidential Decree 477/97 (“PD 477/97”), the Respondent approved a government-supervised programme under which goods bound for import into Argentina would be inspected prior to shipment to Argentina (the “Programme”). The goods were to be inspected by private companies, authorised by the Respondent through international public tender (“Pre-Shipment Inspection Companies”). The inspections were designed to detect inaccurate import declarations and thereby help to combat the loss of tax revenue to the Respondent, which would result from such inaccuracies.
7. The responsibility for the day-to-day supervision and enforcement of the Programme, including the coordination of its audit, was given to a special committee within MECON, known as the Comité Ejecutivo del Programa de Inspecciones de Preembarque de Importaciones (the “Comité”). The Administración Federal de Ingresos Públicos (“AFIP”) was the entity within the Argentine government responsible for the Respondent’s customs administration and was mainly responsible for paying the invoices approved by the Comité.
8. The operation of the Programme was to be audited by a private company which was to be selected by the Respondent through a national and international public tender (the “Auditor”). Under the Programme, the Auditor was required to audit the services provided by the Pre-Shipment Inspection Companies and thereby enable the Respondent to identify any shortfalls in the taxable values which were attributed to imported goods which were caused by the failure of the Pre-Shipment Inspection Companies to properly perform their duties.
9. ICS (at that time known as Swipco Limited) was awarded the role of Auditor after winning tender No. 13/97.