UPDATE 1-U.S. justices agree to hear BG Group arbitration case
WASHINGTON, June 10 (Reuters) - The U.S. Supreme Court on Monday agreed to hear British company BG Group Plc's appeal over a $185.3 million arbitration award it won against Argentina that an appeals court later threw out.
A U.S. district court ruled in 2007 that BG, a natural gas exploration and distribution company, should recover because a decision by the Argentine government in 2002 to introduce a gas price freeze breached a 1993 treaty between Britain and Argentina.
This treaty was designed to encourage investment by foreign companies such as Reading-based BG.
Argentina had imposed the price freeze shortly after it announced a roughly $100 billion sovereign debt default at the end of 2001.
BG challenged the freeze, saying it reduced the value of its roughly 45 percent stake in Argentina's Metrogas SA.
An arbitration panel concluded that because Argentina had by emergency decree restricted access to its courts, it would create an "absurd and unreasonable result" to read the treaty literally and require BG to go through the courts first.
But a federal appeals court in Washington, D.C., said in January 2012 that BG should have first tried to sue in Argentina and then wait 18 months for a ruling, as required by the treaty, before resorting to arbitration.
Oral arguments and a decision in the case are due in the court's next term, which starts in October and ends in June 2014.
The case is BG v. Argentina, U.S. Supreme Court, No. 12-138.