Uruguay has reached an agreement with Neltume Ports to end a US$600 million international arbitration linked to container terminal operator Montecon and operations at the Port of Montevideo.

Neltume Ports, the majority shareholder in Montecon, has irrevocably withdrawn its claims against the Uruguayan state before the World Bank’s International Centre for Settlement of Investment Disputes (ICSID).

Under the agreement, Uruguay will pay no compensation and has accepted no liability or additional obligations.

Neltume withdraws claims against Uruguay

The dispute began in April 2024, when Chile-based Neltume Ports, acting on its own behalf and on behalf of Montecon, initiated arbitration proceedings against Uruguay under the investment agreement between Uruguay and Chile.

The claim sought an estimated US$600 million from the state.

As part of the settlement, Neltume has withdrawn all claims, actions and demands against Uruguay.

Neltume, Montecon and their related companies have also committed not to initiate future legal proceedings against Uruguay over the matters underlying the arbitration.

Uruguay’s Presidency said the agreement involves no compensation to Neltume or Montecon and does not require the state to assume any responsibility or other conditions.

Jorge Díaz, Prosecretary of the Presidency of Uruguay, described the outcome as “a triumph of Uruguay at the international level.”

Dispute linked to Montevideo container operations

The arbitration emerged from changes to the container terminal structure at the Port of Montevideo.

In 2021, Uruguay reached an agreement with Katoen Natie concerning Terminal Cuenca del Plata (TCP), the specialised container terminal at Montevideo.

The agreement extended TCP’s concession until 2081, while Katoen Natie committed to a major investment programme at the terminal.

Montecon, which operates primarily at Montevideo’s public berths, challenged the impact of the arrangement on its business and the competitive conditions for container handling at the port.

Neltume subsequently brought its claim against Uruguay through ICSID.

Separate ATCO arbitration remains

The agreement does not close all international proceedings connected with Montecon.

A separate arbitration initiated by ATCO, another shareholder in Montecon, remains outstanding.

Uruguay’s government said it expects that proceeding to be resolved in a similar manner, although no final agreement has yet been announced.

The Neltume settlement therefore removes the US$600 million claim against Uruguay but leaves the second Montecon-related arbitration still to be concluded.

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ATCO has purchased 40 per cent of shares in Neltume Ports, which operates 16 port facilities and three stevedoring businesses, primarily located in Chile and Uruguay.

The Canadian company spent C$450 ($340) million in the deal and Nancy Southern, chair and CEO with ATCO, said the investment will allow Neltume to finance growth opportunities and has strengthened ATCO’s partnership with Neltume’s parent company, Ultramar.

Read more on Calgary Herald.

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