On March 3, 2008, the Honorable Robert Carter, United States District Judge for the Southern District of New York, granted a motion to dismiss the complaint in favor of our client, Agua y Saneamientos Argentinos S.A. (AySA), on the grounds of forum non conveniens. The case, Aguas Lenders Recovery Group, LLC v. Agua y Saneamientos Argentinos S.A., is a multi-million dollar litigation brought against AySA by various lenders seeking to recover on loans to which AySA was not a party.
Throughout the late 1980s and early 1990s, the Argentine government pursued a policy of privatizing its public services and utilities. Under this policy, the government awarded a 30-year concession to a private corporation, Aguas Argentinas S.A., to provide water and sewerage services in Buenos Aires. In 2006, Argentina terminated Aguas' contract on grounds of material breach. Subsequently, the Argentine government incorporated AySA to take over Aguas's role and provide water and sewerage services in Buenos Aires. AySA is majority owned by Argentina and is a foreign sovereign under the Foreign Sovereign Immunities Act.
In September 2006, a group of lenders that had previously made loans to Aguas created a limited liability company designated Aguas Lenders Recovery Group, LLC (ALRG). On the same day that it was created, ALRG filed a lawsuit against AySA in the United States District Court for the Southern District of New York. In its complaint, ALRG alleged that AySA should be held liable for Aguas' debts under the loan agreements as successor in interest to Aguas, even though AySA and Aguas are entirely distinct entities and AySA was not even created until years after both the execution of the Aguas loan agreements and Aguas' initial defaults on those loans. ALRG asked the court to extend its arm into Argentina on behalf of foreign banks to avoid what it claimed to be a fraudulent transfer of assets from Aguas to AySA of the government assets used to provide water and sewerage services. AySA moved to dismiss the claims against it on several grounds, including foreign sovereign immunity, the Act of State doctrine and forum non conveniens.
In his nineteen-page opinion granting AySA's motion, Judge Carter thoroughly analyzed the issue of forum non conveniens and concluded that New York was not a proper venue for the lawsuit and that Argentina would be a more appropriate venue. Consistent with his decision, Judge Carter entered an order dismissing the complaint against AySA.
Simpson Thacher partners on the matter include John J. Kerr, Jr. and David L. Williams. Associates include Janet Whittaker, Jessica Murzyn, Silvia Ostrower, Mark Villaverde, Allyson Rothberg, Heather Shaffer and Michael Ybarra. Paralegal Magallie Kortright also provided invaluable assistance.