By Damon Vis-Dunbar
2 October 2009
The Spanish multinational Telefonica and Argentina have discontinued their arbitration at the International Centre for Settlement of Investment Disputes. The proceedings had been suspended since October 2006, as the parties worked towards a settlement agreement.
Telefonica initiated its claim in 2002, alleging breaches of the Spanish-Argentina Bilateral Investment Treaty. The Spanish firm held a multi-billion dollar stake in Argentina’s local phone company when in 2001 fixed line rates were frozen in response to the country’s financial crisis.
In recent years the Spanish firm has seen a boost in revenues outside of fixed-line telephone calls, particularly in the mobile phone market. Revenues in Argentina for the first half of 2009 totaled 1,332 million euros, according to Telefonica’s financial statements.