In a major decision, an arbitral tribunal in the International Chamber of Commerce ("ICC") has issued a ruling on the liability of YPF, the state-controlled energy company of Argentina, for its role in the suspension of natural gas exports to Brazil. The claim that YPF unlawfully rescinded its contracts was brought forward by AES Uruguaiana and by Transportadora de Gas del Mercosur in 2009. They are reportedly seeking $1.6 billion dollars in compensation. YPF is controlled by the Argentinian government following its nationalization last year - another dispute that is currently also in arbitration.
Mandatory arbitration clauses present in contracts are binding on assignees of those contracts, even where the transfer agreements assigning those contracts do not themselves contain arbitration clauses, the United States Court of Appeals for the First Circuit has ruled.
Aside from the flexibility to tailor the process to the particular needs of the case, arbitration also enjoys another major advantage over litigation: The ability to keep the proceedings confidential. Although a party involved in litigation can move to seal the court proceedings, public access to court records is a central tenet of the American legal system that cannot easily be restricted.