PROJECTS
Mobil Exploration and Development Inc. Suc. Argentina and Mobil Argentina S.A. v. Argentine Republic, ICSID Case No. ARB/04/16
The problem
An ICSID Tribunal found that Argentina’s changes to gas market rules following its 2002 currency crisis damaged Mobil Argentina’s gas supply business, and breached the US–Argentina Bilateral Investment Treaty. However, the Tribunal was not sure what damages to award. Estimating the financial effects of regulatory changes in the complex Argentinian gas market was difficult. Expert evidence submitted by Mobil estimated gave the damages at over US$300 million, while Argentina’s experts testified that the damages were less than US$10 million.
How we helped
ICSID engaged Castalia to provide independent advice directly to the arbitration panel on how to estimate the quantum of damages. To do this, we used a model of the wholesale gas market within Argentina, and between Argentina, Chile and Bolivia. We examined the data on actual prices and volumes sold by Mobil and compared these to the prices and volumes that would have prevailed, had the changes in rules and regulations not taken place. Comparing this counterfactual to the actuals provided a well-reasoned basis for quantifying damages, which the arbitration panel was able to rely on.
Impact
The ICSID panel awarded damages against Argentina of US$196 million. In doing so, the Tribunal stated that it agreed with the methodology and calculations provided by Castalia’s expert, subject to certain modifications specified in the award.
Our team
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Thinking for a better world.

WASHINGTON, DC
+1 (202) 466-6790
1747 Pennsylvania Avenue NW, Suite 1200
United States of America
SYDNEY
+61 (2) 9231 6862
Suite 19.01, Level 19, 227 Elizabeth Street
Australia
AUCKLAND
+64 (4) 913 2800
74D France Street, Newton South
New Zealand
WELLINGTON
+64 (4) 913 2800
Level 2, 88 The Terrace
New Zealand
PARIS
+33 (1) 73 44 26 97
6 Rue Duret
France
BOGOTÁ
+57 (1) 508 5794
Calle 81 #11-08, Piso 5, Oficina 5-127
Colombia
Thinking for a better world.
