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Argentine National Commercial Court of Appeals holds that disputes involving Argentine Code of Mining cannot be arbitrated
Practical Law Legal Update 9-505-3748 (Approx. 2 pages)
Argentine National Commercial Court of Appeals holds that disputes involving Argentine Code of Mining cannot be arbitrated
| Published on 31 Mar 2011 • Argentina |
Francisco M. Gutiérrez (Partner) and Federico Campolieti (Senior Associate), M. & M. Bomchil
In a decision rendered on 5 October 2010 and published on 28 February 2011, the National Commercial Court of Appeals, chamber C, seated in the City of Buenos Aires, declared that a dispute between two mining companies which required the interpretation and application of the Argentine Code of Mining cannot be submitted to arbitration.
In CRI Holding Inc. Sucursal Argentina c/ Compañía Argentina de Comodoro Rivadavia Explotación de Petróleo S.A., an American subsidiary and Argentine corporation had executed a Joint Operation Agreement (JOA) for the purpose of developing mining activities together in Argentina, which contained an agreement to arbitrate any dispute arising out of the JOA.
The circuit court rejected a claim filed by one of the parties of the JOA for the constitution of the arbitral tribunal on the grounds that all the provisions contained in the Argentine Code of Mining concern "public order" issues.
The National Commercial Court of Appeals upheld the decision of the circuit court stating that a dispute in which the mining legal framework is concerned involves issues of "public order" and, therefore, it is not arbitrable under the Argentine legislation. The Court of Appeals declared that the agreement to arbitrate was invalid and further stated that the category of cases concerning "public order" extends to every dispute involving the regulated industry of mining.
The decision is highly controversial because it considered that disputes which involve the application of mandatory law or public policy issues fall into the non-arbitrability doctrine. This approach is contrary to the international trend to widen the scope of arbitrability.