The U.S. Supreme Court agreed to consider reviving a $185 million award won by BG Group Plc in a dispute with Argentina over that country’s 2002 cap on natural gas prices.
The high court today said it will hear an appeal by the U.K. oil and gas company of a federal appeals court decision that threw out an arbitration award in BG’s favor.
The lower court said the arbitration panel in Washington lacked power to take up the dispute. The appeals court pointed to a U.K.-Argentine treaty that requires disputes to be submitted to a court in Argentina for 18 months before arbitration can begin.
In its Supreme Court appeal, BG argues that the arbitrator, rather than the appeals court, should have been the one to determine whether arbitration would go forward.
BG says the price freeze caused the bankruptcy of Metrogas SA, an Argentine gas distributor it previously controlled. BG says that, had it filed suit, it would have been punished under Argentine law and excluded from negotiations designed to mitigate the effects of the price cap.
The Obama administration urged the high court to reject the BG appeal, saying the appeals court reached the right decision.
The court will hear arguments during the nine-month term that starts in October. The case is BG Group v. Argentina, 12-138.