In the past days we have witnessed an increasing international dispute between Spain’s oil giant Repsol and Argentina. The dispute was triggered by the Argentinean expropriation of Repsol’s Argentine subsidiary, which came on the heels of the nationalist expressions of irredentism for the Falklands/Malvinas islands. This past Monday 16th April, the announcement of expropriation of Repsol by Yacimientos Petroliferos Fiscales  (YPF) caused a notable shock that has been followed by political and economic distress in Spain. By contrast, the draft law presented to the Congress for expropriation was applauded in Argentina. In Spain, the decision has to a large extent been received as an act of nationalist aggression, as were the similar cases of expropriation in Venezuela and Bolivia some years ago. Furthermore, the announcement was made soon after the King of Spain had an accident on a controversial hunting trip in Botswana, producing widespread bitterness in a country in serious social, economic and political crisis.
Since 1999, the Spanish oil company Repsol has possessed exploitation rights for the majority of Argentina’s oil resources. Former Argentinean President Nestor Kirchner, deceased husband of the Argentinean President Cristina Fernández Kirchner, granted these rights approximately amounting to 15 billion US dollars provided by the company presided by Antoni Brufau. The takeover of Repsol in Argentina and the control of the oil reserves was carried out in several stages and involved different partnerships and shareholders. The Eskenazi family stands out among these partners for having been brought into the bid in 2008 by the former Argentinean President. Nevertheless, Argentina retained the golden share.
In recent years, increasing dependency of Argentinean development on energy resources has come into contradiction with the need to assure oil resources of the European Union and the declining of Spain. Now the Argentinean oil resources appear to be another icon of the synergies of the former developed regions with the newly developing States.
From an international legal stand, the resolution of the dispute should be guided by the Bilateral Investment Treaty (BIT) concluded between Argentina and Spain, and governed by international law. This BIT declares the procedure to follow in case of dispute in Article 9, specifically negotiation by diplomatic means over a period of six months. If no agreement is reached by these means, the BIT calls for the constitution of an arbitral tribunal.
If the national authorities agree that their treaty clause is in correspondence with the provisions set forth by Article 9 of the BIT, it could well be possible that this case will fall under the conciliation or arbitration auspices provided by the World Bank International Centre for Settlement of Investment Disputes (ICSID).
It follows that this will be a case potentially decided by international arbitration, with all agreed national rules, where the arbitral tribunal will judge the matter in accordance to all applicable international law, the ICSID convention, as well as the BIT.
The arbitral tribunal most certainly will determine the factual background to the controversy, and specifically the privatization process, as can be appreciated in the exercise of arbitral authority in the jurisprudence of other such tribunals. The issues of contract compliance and non-compliance will also be scrutinized as well as the termination of the Concession Agreement. As concerns the parties, most certainly Spain will base its arguments on seguridad juridica (the Spanish legal concept of legal security) and thus alleged violations of Argentine obligations under the BIT. Spain will also likely rely on arguments of the pacta sunt servanda, such as they are requiring fair and equitable treatment, non-discrimination, and full protection and security.
In any event, this dispute should not foster further conflict, something that as for now does not appear to appeal to the authorities of either Government. Spain and Argentina cooperate in numerous ways on the international stage. It should be recalled that both States have an obligation to find a peaceful settling of their disputes, as requires the UN Charter and international law. It is more than evident that a claim for a breach of international legality cannot be an argument for fostering further disputes on the side of Spain that Friday announced commercial restrictions with Argentina. On the other hand, Argentina has an international obligation to serve its legal commitments, and if these commitments are deemed to require a readjustment of national action, this must be guided by principles of lawfulness.
 Fiscal petroleum fields YPF was the governmental institution in charge of the Argentinean State oil resources. However, it should be noted that Fiscal in Spanish speaking States necessarily refers to a capacity of a State in fiscal matters, which appears to create contradictions in the use of this name since privatization in 1993.
 Acuerdo Para la Promoción y la Protección Reciproca de Inversiones Entre La Republica Argentina y el Reino de España. Suscripto en Buenos Aires, el 3 de octubre de 1991 y aprobado por Ley 24118, sancionada el 5 de agosto de 1992 y promulgada el 3 de septiembre de 1992.
 See International Convention for the Settlement of Investment Disputes:
 Article 42 (1) of the International Convention for the Settlement of Investment Disputes: The Tribunal shall decide a dispute in accordance with such rules of law as may be agreed by the parties. In the absence of such agreement, the Tribunal shall apply the law of the Contracting State party to the dispute (including its rules on the conflict of laws) and such rules of international law as may be applicable.
 Charter of the United Nations (1945 as amended) at Evans, Malcolm: International Law Documents, Oxford University Press 8ed. (2007) 9 et seq; Cogliandro, Giovanni: International Investment Arbitration: Substantive Principles, International and Comparative Law Quarterly (2007) 735-6; D. Jones: The Iran-United States Claims Tribunal: Private Rights and State Responsibility, Virginia Journal of International Law (1983) 259 et seq; Evans, Malcolm. International Law Documents 8 (2007); Gonzalez de Cossio, Francisco: The International Centre for Settlement of Disputes, ‘The Mexican Experience’, Journal of International Arbitration (2002) 227 et seq; Merrills, John: The Means of Dispute Settlement, in: Evans, Malcolm (ed.), International Law, 2nd ed., Oxford (2006) 533 et seq; Waibel, Michael: Two Worlds of Necessity in ICSID Arbitration: CMS and LG&E, Leiden Journal of International Law (2007) 637 et seq; Azurix Corp. v. Argentina Republic, ICSID Case No. ARB/01/12, Award, July 14th of 2006; Azurix Corp. v. Argentina Republic, ICSID Case No. ARB/01/12, Decision on Annulment, September 1st of 2009; Convention on the Settlement of Investment Disputes Between States and Nationals of Other States of March 18th of 1965; Resolution 2625 of the United Nations General Assembly on the Declaration of Principles of International Law Concerning Friendly Relations and Cooperation among States in accordance with the Charter of the United Nations, 24 October 1970; Resolution of the General Assembly on the Manila Declaration on the Peaceful Settlement of International Disputes, 15 November 1982; Convention on the Recognition and Enforcement of Foreign Arbitral Awards of 1958.