**Montecon Withdraws Arbitration Claim Against Uruguay, Ending Prolonged Port Dispute**
Montevideo, Uruguay – On 1 September 2026, Neltume Ports, the majority shareholder of Montecon, notified the International Centre for Settlement of Investment Disputes (ICSID) that it was irrevocably withdrawing the arbitration it had initiated against the Uruguayan State. The withdrawal, submitted just days before the first formal hearing in the case, is binding; Montecon will be barred from filing a new claim on the same grounds in the future.
### Background of the dispute
– **2021 concession extension** – In 2021, the administration of President Luis Lacalle Pou signed an agreement with Belgian logistics firm Katoen Natie to extend the concession for the Terminal Cuenca del Plata (TCP) until 2081. The deal involved an investment of roughly US $650 million, the largest ever announced for the Montevideo port.
– **Montecon’s objections** – Montecon, which operates on public docks under temporary permits, argued that the extension gave TCP an unfair advantage. In April 2021 the company claimed the state was “giving 100 % of the container market” in Montevideo to Katoen Natie. Katoen Natie later warned it might lodge its own claim before the ICSID for US $1.5 billion if the agreement’s terms were altered.
– **Arbitration filing** – In May 2024, Neltume Ports and ATCO, shareholders of Montecon, formally requested arbitration before the ICSID, seeking US $600 million in damages. The claim was based on the assertion that the concession extension violated the Uruguay‑Chile Bilateral Investment Treaty (the “Agreement on Promotion and Protection of Investments”).
– **Arbitration panel** – The tribunal was constituted in July 2025, with Peruvian lawyer Alfredo Bullard as president, Argentine member Valeria Galíndez appointed by the claimant, and Italian member Loretta Malintoppi appointed by Uruguay. The proceedings experienced several suspensions, including a 120‑day pause agreed in August 2025 for direct negotiations, followed by additional 90‑day extensions. In June 2026 the Montecon shareholders recused the arbitrator designated by the Uruguayan government, halting the process again.
### Domestic court ruling
In February 2026, Uruguay’s Tribunal of Administrative Contentious (TCA) issued a decision that struck down clause 3.4.5 of Decree 114/2021. The clause had prohibited the granting of new concessions for a specialized container terminal while the TCP concession was in force. Writing for the court, Minister William Corujo Guardia described the clause as creating a “monopoly” for TCP and deemed it “illegitimate.” The TCA upheld the remainder of Montecon’s claims and affirmed the legality of the regulatory framework governing the TCP concession.
Katoen Natie’s legal counsel described the ruling as a “confirmation of the validity of the regulatory framework.” Uruguay’s Transport Minister Lucía Etcheverry said the annulment removed a restriction that could limit the state’s ability to enhance port competitiveness. President Yamandú Orsi indicated that the government respects the court’s decision.
### Reasons for the withdrawal
Montecon’s decision to abandon the arbitration was not sudden. On 19 August 2026, shortly before the scheduled hearing, Neltume Ports informed the ICSID of its intent to desist. Earlier, in August 2025, Montecon had submitted a proposal to develop a multipurpose terminal at the port, which the Uruguayan government rejected in May 2026.
The TCA’s February 2026 ruling, which eliminated the “monopoly” clause, altered the strategic landscape. By removing the legal barrier to a second container terminal, the state regained discretion over the port’s future development. Montecon’s shareholders cited the ruling as a partial victory and noted that continuing a costly, protracted arbitration was no longer viable.
### Implications
The withdrawal ends a dispute that had lingered for more than five years and had generated legal uncertainty for the Montevideo port’s operations. According to the Uruguayan executive branch, the settlement does not entail any financial cost to the state, nor does it constitute an admission of the allegations raised by Montecon in its original claim.
The case illustrates the complex interaction between international investment arbitration and domestic judicial decisions, and it underscores the importance of regulatory stability for the competitiveness of Uruguay’s maritime infrastructure.
Article and image source: lr21.com.uy
