US court rejects Argentina's appeal in Aerolíneas Argentinas expropriation case, $390 million payment looms

A U.S. appeals court has dismissed Argentina's attempt to avoid paying $390 million in a lawsuit concerning the expropriation of Aerolíneas Argentinas. The ruling by the Appeals Court of Columbia dealt a blow to Argentina's efforts to challenge the decision made in the International Centre for Settlement of Investment Disputes (ICSID).

The original case involved the 2008 expropriation of the airline during Cristina Kirchner's presidency. Argentina lost the initial lawsuit at ICSID, which ordered the country to pay $320 million plus interest, a sum that has now grown to approximately $390 million.

The Procuratorate of the National Treasury stated it is analyzing all available legal avenues to reverse or mitigate the consequences of the decision. The office attributed the case to decisions made nearly two decades ago, describing it as part of a "heavy judicial and institutional inheritance" from previous administrations, with current claims and adverse judgments against Argentina exceeding $30 billion upon the current administration's assumption of office in December 2023.

Sebastián Maril noted on X that the Appeals Court's ruling against Argentina in the Aerolíneas Argentinas expropriation case also reactivates the Webuild case, which had been suspended pending the Aerolíneas decision. The investment fund, Titan Consortium, which acquired the litigation rights against Argentina for the nationalization, is also seeking to seize Argentine assets in the U.S. to collect the awarded compensation.

The case originated with the Spanish group Marsans, which controlled Aerolíneas Argentinas and Austral before their state expropriation in 2008. Marsans sought compensation from ICSID, and later transferred this right to Burford Capital, which then assigned it to Titan Consortium. Such funds are common in international finance, providing upfront capital for a share of any eventual recovery.

ICSID lacks its own enforcement mechanism. When a country fails to pay, creditors must pursue payment through the courts of jurisdictions where sovereign assets are located. In 2017, ICSID ordered Argentina to pay over $320 million plus interest and costs, a ruling Argentina attempted to annul unsuccessfully in 2019.