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Necessity in International Investment Arbitration— An Unnecessary Split of Opinions in Recent ICSID Cases?

Necessity in International Investment Arbitration— An Unnecessary Split of Opinions in Recent... I. INTRODUCTION On 3 October 2006 the ICS11) tribunal in the LG&E v. Argentina1 Case rendered its decision on liability. This award broadly addresses the issue of state of necessity both under general international law as well as under the applicable treaty clause of the Argentina-US BIT-' and concludes that such a situation prevailed in Argentina during a 15-months period between 2001 and 2003 exempting the respondent state of its responsibility for violating various investment standards under the Argentina-US BIT. The LG�E tribunal thereby departs from the result reached in the CMS v. Argentina3 Case by another ICSID tribunal 15 months earlier whose findings curiously are not even mentioned. This article will focus on the way how the two ICSID tribunals have addressed the question of state of necessity as a ground for precluding the wrongfulness of host state action in an investment context.4 In recent years a large number of arbitral proceedings have been instituted before the International Centre for Settlement of Investment Disputes (ICSID) against Argentina.5 Most of these claims have been brought following the economic crisis in Argentina in the late 1990s. Foreign investors have claimed losses suffered due to actions set by the Argentine http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of World Investment and Trade Brill

Necessity in International Investment Arbitration— An Unnecessary Split of Opinions in Recent ICSID Cases?

Journal of World Investment and Trade , Volume 8 (2): 208 – Jan 1, 2007
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Publisher
Brill
Copyright
Copyright © Koninklijke Brill NV, Leiden, The Netherlands
ISSN
1660-7112
eISSN
2211-9000
DOI
10.1163/221190007X00074
Publisher site
See Article on Publisher Site

Abstract

I. INTRODUCTION On 3 October 2006 the ICS11) tribunal in the LG&E v. Argentina1 Case rendered its decision on liability. This award broadly addresses the issue of state of necessity both under general international law as well as under the applicable treaty clause of the Argentina-US BIT-' and concludes that such a situation prevailed in Argentina during a 15-months period between 2001 and 2003 exempting the respondent state of its responsibility for violating various investment standards under the Argentina-US BIT. The LG�E tribunal thereby departs from the result reached in the CMS v. Argentina3 Case by another ICSID tribunal 15 months earlier whose findings curiously are not even mentioned. This article will focus on the way how the two ICSID tribunals have addressed the question of state of necessity as a ground for precluding the wrongfulness of host state action in an investment context.4 In recent years a large number of arbitral proceedings have been instituted before the International Centre for Settlement of Investment Disputes (ICSID) against Argentina.5 Most of these claims have been brought following the economic crisis in Argentina in the late 1990s. Foreign investors have claimed losses suffered due to actions set by the Argentine

Journal

Journal of World Investment and Trade – Brill

Published: Jan 1, 2007

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