While a clash between the Argentine government and leading steelmaker Siderar (ERAR.BA, SDDFF) over government efforts to vote for company directors makes its way to the courts, the chief of a powerful manufacturers chamber urged calm and dialog to smooth over the dispute.

"This isn't an issue that should get tied up in the courts...consensus should be reached through dialogue," said Jose Ignacio De Mendiguren, president-elect of Argentina's UIA chamber told Dow Jones Newswires.

However, Mendiguren said the government had clearly changed the rules of the game and the UIA has urged the government to reconsider. "This is bad for everyone, because there's a positive [economic] climate right now."

On April 14, President Cristina Fernandez issued a emergency decree giving the government more power to name board members to companies in which it holds shares. The state's voting rights at such companies were previously capped at 5% even if its actual ownership in a firm exceeded that.

Anses acquired stakes in 42 companies after Congress nationalized the private pension system at the peak of the 2008-09 financial crisis. The government has a 26% stake in Siderar through the national pension agency Anses, and has its largest stake at over 30% in Banco Macro (BMA.BA, BMA).

Last week, Argentina's securities regulator, the CNV, voided Siderar's shareholder's meeting, in which the existing directors approved an ARS1.5 billion ($370 million) dividend and blocked a government attempt to put its man on the board.

Anses director Diego Bossio hinted Wednesday that it wanted to see higher dividends from the steelmaker. "There's another 6.5 billion pesos that they haven't said what they're going to do with," Bossio was quoted as saying in state news agency Telam.

Siderar has filed suit challenging the government move, while the government has counter-sued.

Daniel Novegil, chief executive of steelmaker Ternium SA (TX), Siderar's parent company, said in a radio interview the executive branch overstepped its authority by issuing a decree rather than turning to congress.

The courts are faced with determining the constitutionality of the move and much will hinge on which judge the case comes before. "I think many judges would say it's unconstitutional, while some others would not," said Marcela Basterra, Constitutional Law Professor at the University of Buenos Aires.

In the professor's view, the government move is clearly illegal. "The constitution allows for these kind of decrees only when there is a situation that is so grave that the government cannot wait for Congress to pass laws. We are not in such a situation now," Basterra said. In any case, it will be a long, drawn out legal tangle, with a good chance of winding its way to the supreme court, she said.

In the meantime, markets are taking the dispute in stride.

"At the end of the day, things haven't changed much," said Diego Martinez Burzaco, Portfolio Manager at brokerage Puente. "The strong prospects for the economy are more important to investors."

Since the plan was announced on April 13, the Merval Index of leading shares has risen 0.1% and was trading at 3,409.13 points on Wednesday afternoon.

Rating agency Moody's Investor Services says the move is credit-negative for Argentina's companies, as it signals the government will have greater influence on their commercial and strategic decisions. However, Moody's isn't contemplating any ratings downgrades at the moment.

"The government doesn't have a majority in any of the banks rated by Moody's, and there's no imminent risk of the government being able to exert undue influence," said Moody's Senior Credit Officer Andrea Manavella in an interview. "There could be more negotiations and decisions could take more time [but] we don't see complications," she said.

Moody's senior analyst Daniela Cuan focuses on the ratings of many of Argentina's top utilities providers and also sees no immediate impact. For companies providing utilities services rated by Moody's, tight government regulations which block them from raising rates is far more important and has hit their profits, Cuan said.

-By Shane Romig, Dow Jones Newswires; 54-11-4103-6738; shane.romig@dowjones.com

--Alberto Messer and Taos Turner contributed to this article.