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Should a foreign investor have its assets expropriated (whether directly, or through creeping expropriation or regulatory encroachment), a qualifying investor would have claims for unlawful expropriation and breach of the FET standard under any applicable investment treaties. A map of those treaties to which Argentina is a party can be seen HERE. The main advantage of being able to pursue such an investment treaty claim would be to avoid having to sue the Argentinian authorities in their own courts. In addition, investors may have access to claims in the domestic courts.

Constitutional protection of property rights

Under Argentine law, shares in a private company are constitutionally protected property rights, and can only be expropriated through the enactment of an expropriation law by the National Congress with previous proper compensation and a formal declaration of the public use or utility involved (National Constitution, art. 17).

Expropriations Law No. 21,499

Expropriations Law No. 21,499 further regulates this formal expropriation proceeding. In general terms, after the National Congress enacts the law, the National Executive and the expropriated party must agree on the value and, absent such agreement, an official authority must appraise the property’s value, which must be previously paid or deposited by the National Executive prior to taking possession over the property.

However, this procedure can present some setbacks in certain cases, most notably due to the fact that Expropriations Law No. 21,499 prohibits the payment of compensation in respect of loss of profits—a key compensation concept in the expropriation of profit-making companies.

Official appraisals may therefore widely vary depending on the methodology used to ascertain the present value of the expropriated shares (e.g., in the expropriation of Spanish-owned airline Aerolíneas Argentinas, appraising authorities reached the conclusion that the value was negative due to its current capital-debt structure, and therefore no compensation had to be paid).

Nonetheless, the legal system allows for a judicial procedure to be initiated to discuss the appraisal methodology and assumptions.

Additionally, there are indirect or “creeping” ways nationalization may take place, such as the enactment of legislative or administrative regulations that substantially limit the exercise of the owner’s rights. For these cases, Argentine law grants several remedies that may apply depending on the case.

For instance, the owner may seek to consider such a case as an “abnormal” expropriation and thus go to court to seek to obtain a full expropriation, with payment of the compensation, under the “abnormal” expropriation proceeding regulated by Expropriations Law No. 21,499 and which is similar to the one described above.

Alternatively, the owner may seek annulment of such regulations and full compensation of all losses suffered (including loss of profits) under State Liability Law No. 26,944. In such a case, it would have to demonstrate that such regulations are unconstitutional. In addition, before reaching a court it would have to submit a prior administrative claim according to Administrative Procedures Law No. 19,549.

Finally, if the regulations are not nullified, still the owner may seek compensation under State Liability Law No. 26,944, but without being able to obtain loss of profits and also having to meet a higher evidentiary standard (i.e., having to demonstrate that the regulations imposed a “special sacrifice” over the owner, different than that to the rest of society or similar market players).

Administrative proceedings

Another manner in which nationalization can take place is through the unilateral revocation of licenses, permits or contracts granted to the investor authorizing a specific activity or service (this is especially the case for public utility companies, mostly natural gas and electricity distributors or transporters, as well as telecommunication operators).

In these cases, such decisions must be challenged in a previous administrative procedure, and only once the latter is completed can the expropriated licensee, permittee or contractor submit its challenge in court.

As a final note, in all these cases the National Government must be sued before Federal Courts, which in turn tend to defer in favour of the National Government’s policies and decisions, unless explicit and gross violations to applicable laws took place.


Claudia Benavides is a partner in Baker McKenzie's Bogotá office. She has been the global chair of the Dispute Resolution Practice Group since 2019. Claudia is a highly regarded expert in transnational litigation and international arbitration. She has over 25 years of extensive experience handling complex litigations and arbitrations related to construction and infrastructure projects, post-acquisition disputes, disputes in the energy sector, distribution and supply agreements, insolvency, and general breach of contract. Claudia often advises investors on treaty planning and leveraging international protections in the context of government interference. She has been recognized by many of the most renowned international rankings and publications.


Luis E. Dates is a partner in Baker McKenzie's Buenos Aires office. He practices public law, litigation, alternative dispute resolution and international and domestic arbitration. He has represented and continues to represent several clients in ad hoc arbitral proceedings, as well as in proceedings administered by local arbitral institutions, such as the Buenos Aires Stock Exchange Market Arbitral Tribunal, the Buenos Aires Grain Market Arbitral Tribunal and the Private Center for Mediation and Arbitration and international institutions, as the ICC.


María del Carmen Tovar Gil is a partner in Baker McKenzie's Lima office. She leads the office's International Arbitration Practice Group, specializing in national arbitration and international investment and commercial arbitration involving different industries.


Santiago Maqueda is a partner in Baker McKenzie's Buenos Aires office. He practices public law, litigation, alternative dispute resolution and international and domestic arbitration.


Natalia Mori is an associate in the Firm's North American Dispute Resolution group in New York. Prior to joining Baker McKenzie's New York office, Natalia was a member of the Estudio Echecopar team, a member firm of Baker McKenzie International based in Lima, Peru. Natalia has been part of the Regulatory team in Estudio Echecopar for the past seven years. Aside from advising clients on Administrative Law matters, Natalia also has experience in litigation and arbitration, advising clients in administrative proceedings and domestic and international arbitrations. Natalia regularly advises on Public-Private Partnerships and Public Procurement matters. She is also heavily involved in all manner of administrative law advisory, including the drafting of regulations and laws, representing clients in sanctioning proceedings against government agencies and advising on Municipal law matters and proceedings. Additionally, Natalia has experience in both domestic and international arbitration, mainly related to disputes arising out of government contracts. Natalia Mori can be reached at and +51 1 618 8411.