## Facts

- Swift, an Argentine meat-packing company, entered severe financial distress; a bankruptcy court rejected reorganization and ordered liquidation.
- After liquidation was ordered, the National Executive directed continuation of Swift’s operations under Law 18.832 and Decree 5163/71, citing public interest, including meat exports, employment, and social peace.
- From Nov. 10, 1971 to Aug. 6, 1977, state-appointed administrators operated Swift’s business and submitted quarterly accounts to the bankruptcy judge; the judge approved the accounts.
- Swift and its affiliated financial company Deltec sued the National State seeking damages allegedly caused by the state intervention and administration.
- Claimed damages included: (1) reduced working capital at the end of state administration compared to its start; (2) excess interest payable to verified creditors; and (3) deterioration of the asset-to-liability relationship between the start of occupation and the ultimate payoff of liabilities.
- The trial court largely granted compensation; the federal appellate court reversed and dismissed both claims with costs.
- Swift and Deltec filed ordinary appeals to the Supreme Court; separate appeals challenged expert-fee determinations.

## Issues

1. Whether the National State incurred civil liability for damages arising from its lawful intervention and administration of a bankrupt enterprise under Law 18.832 and Decree 5163/71.
2. Whether Law 18.832 was unconstitutional for not providing an express compensation mechanism for losses allegedly resulting from its application.
3. Whether plaintiffs proved compensable damage and a causal link between the alleged economic deterioration and the state administration, as opposed to external market conditions in the meat industry.
4. Whether judicial supervision of the administrators’ accounts precluded attributing mismanagement-based liability to the State.

## Decision

- The Supreme Court affirmed the appellate judgment dismissing Swift’s and Deltec’s damages actions against the National State.
- The Court held the plaintiffs failed to prove compensable damage and failed to establish causation between the alleged losses and the State’s conduct.
- The Court held Law 18.832 was not unconstitutional merely because it did not include an indemnification clause.
- The Court rejected the argument that administrators’ employment-preservation concerns were the determining cause of the firm’s economic problems, given proof of a broader crisis in the meat industry affecting large establishments.
- The Court also addressed expert-fee appeals, setting aside portions of the fee regulation that lacked sufficient reasoning.

## Legal Principles

- State liability requires a violation of the legal or constitutional order; lawful state action does not create liability absent legally attributable, proven damage and causation.
- A property-rights violation exists only when conduct prohibited by the constitutional property guarantee is shown; a statute is not unconstitutional solely because it omits a specific compensation scheme.
- A plaintiff seeking damages for government action must prove (1) a concrete compensable injury and (2) a causal nexus between that injury and the challenged state conduct.
- When state administrators operate within a judicially supervised bankruptcy framework, with periodic accounts approved by the bankruptcy judge, claims premised on mismanagement face a heightened barrier absent specific proof of unlawful or injurious acts.
- Economic deterioration coinciding with government administration is not sufficient; the claimant must rule out independent causes supported by the record (e.g., an industry-wide crisis).

## Conclusion

The court denied recovery because the intervention was authorized by law, the statute’s lack of an express indemnity provision did not make it unconstitutional, and the plaintiffs did not prove compensable damage or causation in light of judicial oversight and evidence that broader industry conditions materially contributed to the company’s decline.


Cía. Swift de La Plata S.A. Frigorífica v. Estado Nacional Argentino (Poder Ejecutivo Nacional) (C.S.J.N. Feb. 27, 1997)