In the long-running case of Vivendi v Argentina, an ICSID tribunal has held that Argentina breached BIT obligations relating to fair and equitable treatment and the provision of protection and full security, and that it expropriated the claimants' investment in water utilities in the province of Tucuman. The tribunal found that, in breach of the Argentina/France BIT, the provincial government had mounted an illegitimate campaign against the claimants, aimed at forcing a renegotiation of the governing concession agreement. Elements of the campaign included the wrongful use of regulatory powers to force tariff reductions and to impose various fines and charges, the stirring up of local feeling against the "foreign investor", encouraging customers not to pay their bills, and the passing of enactments prohibiting the claimants from pursuing those customers. In a strongly worded award, the conduct of the provincial government was described as "vindictive" and "politically driven arm twisting".

The award contains some interesting discussion of the proper meaning and scope of the "fair and equitable" standard, the tribunal taking the view that this is not equivalent to, and may go beyond, the minimum standard recognised by international law. The tribunal also confirmed that the related "protection and full security" provision of the BIT is not limited to physical security - any measure depriving a claimant of security may involve a breach of such a provision.

Note, however, that the claimants failed to recover the full amount of damages claimed. The claimants had sought to recover damages of around US$317million, measured by reference to future lost profits. The tribunal rejected this, instead awarding damages of US$105million, representing the amount which the claimants were estimated to have invested in the concession.

A full case report will follow shortly.