This Tuesday, April 26, Neltume Ports SA and ATCO Ltd, shareholders of Montecon SA, port operator of the port of Montevideo, initiated the dispute settlement mechanisms provided for in the Investment Promotion and Protection treaties entered into by Uruguay with Chile and Canada.
The controversy has its origin in the measures adopted by the Uruguayan State on the occasion of the agreement signed between Uruguay and the companies of the Katoen Natie Group, controller of Terminal Cuenca de Plata SA, concessionaire of the specialized terminal of the port of Montevideo.
The measures are questioned by the investors, because “they threaten the free competition of the port operators of the port of Montevideo, they restrict the scope of the port authorizations of its subsidiary Montecon, it establishes a de facto monopoly in favor of Terminal Cuenca de Plata SA and a series of privileges in favor of this company in which the State of Uruguay has a 20% stake”.
In a statement, Montecom stated that through the measures, the State of Uruguay “intervenes in the port services market to favor Terminal Cuenca de Plata SA, order the mandatory diversion of line services to said terminal and establishes another series of privileges that in practice generate a de facto monopoly in their favor”.
“The measures ordered by the State of Uruguay cause serious damage to Montecon and its shareholders Neltume Ports SA and ATCO Ltd for hundreds of millions of dollars, beyond the fact that they seriously harm the users of the port of Montevideo and Uruguay’s foreign trade” Montecon said.
Montecon is a “port operator duly authorized to transfer all types of cargo in the port of Montevideo since 2001, has invested more than 90 million dollars in port infrastructure works, equipment and technology, currently employs more than 700 people and was, until before the measures decreed by the State of Uruguay, the main port operator of the port of Montevideo”.
In view of the measures ordered by Uruguay and “the absence of a dialogue aimed at resolving the situations that affect Montecon, the investors have initiated the conflict resolution mechanism provided for in the Investment Promotion and Protection treaties entered into by Uruguay with Chile and Canada, which consider an international arbitration to resolve the dispute”.
In their communications, Neltume Ports SA and ATCO Ltd “do not ask for privileges or special treatment, only that the free competition regime in force be restored until before the adoption of the measures and under these conditions the development of a more efficient service and competitive for the benefit of the users of the port of Montevideo and the foreign trade of Uruguay”.