Two weeks after Repsol filed the complaint, the International Center for Settlement of Investment Disputes agreed on December 18 to begin the arbitration process, according to the organization's web site.

President Cristina Fernandez nationalized YPF, the country's biggest energy company, in May, accusing Repsol of slack investment to boost output at a time of growing demand.

Repsol, which has denied under investing in YPF, called the move unlawful, discriminatory and a violation of a bilateral investment treaty between Spain and Argentina.

Repsol says the 51 percent stake is worth $10 billion, but Argentine government officials have indicated they think it is worth significantly less. The Planning Ministry has formed a committee to determine the value for compensation purposes.

The ICSID told Repsol and the Argentine government that they had 30 days to name one arbitrator each to a three-member panel that will oversee the case. The third member of the panel must be agreed by both sides.