Pluna Saga: Uruguay Reiterates Commitment to Arbitration Amidst Asset Seizure Allegations

The Uruguayan government denied receiving notifications about asset seizures in Luxembourg related to the Pluna case and the international arbitration with Latin American Regional Aviation Holding S.R.L. (LARAH). In a statement issued yesterday, Tuesday, the Uruguayan state stated that “it does not accept the criminal immunity requested by LARAH for those accused of aggravated fraud during their management of Pluna” and reiterated its commitment to comply with the arbitration award issued in February 2024.

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Context of the arbitration

Uruguay has been negotiating with LARAH since May 2024 with the aim of complying with the award of the International Centre for Settlement of Investment Disputes (ICSID), which obliges the state to pay compensation in the Pluna case. According to the government statement, Uruguay consistently expressed its willingness to meet its legal obligations and offered an economic proposal that LARAH found satisfactory.

However, negotiations broke down on November 14 when LARAH demanded that Uruguay cease criminal proceedings against three former Pluna executives: Hugo Sebastián Hirsch, Arturo Álvarez Demalde, and Matías Campiani. “This is inadmissible for Uruguay, as for any rule-of-law state, and also violates the principles of separation of powers and the technical independence of prosecutors”, the document stated.

Uruguay asserted that the Memorandum of Understanding (MoU) signed on June 15, 2012, between the state, Sociedad Aeronáutica Oriental (SAO), and South American Regional Aviation Holding (SARAH)—direct or indirect shareholders of LARAH—remains in effect. This document establishes SAO and SARAH’s obligation to hold the Uruguayan state harmless against legal actions related to Pluna.

As a result, Uruguay considers that any payment arising from the award must be covered by LARAH through the obligations stipulated in the MoU.

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Despite disagreements with LARAH, Uruguay reiterated its intent to comply with the arbitration award and expressed willingness to explore amicable solutions that respect the Constitution and laws. “Uruguay always maintains its commitment to fulfilling all its legal obligations but is unwilling to accept conditions that flagrantly violate the Constitution and laws”, the statement concluded.

This declaration follows reports of the seizure of Uruguayan assets in Luxembourg, a procedure for which the government claims it has not received formal notification.

See also: PLUNA: Uruguay’s assets seized in Luxembourg