Understanding the Debate over Necessity: Unanswered Questions and Future Implications of Annulments in the Argentine Gas Cases

By Martinez, Elizabeth A. | Duke Journal of Comparative & International Law, Fall 2012 | Go to article overview

Understanding the Debate over Necessity: Unanswered Questions and Future Implications of Annulments in the Argentine Gas Cases


Martinez, Elizabeth A., Duke Journal of Comparative & International Law


INTRODUCTION

Over the past several years, foreign investors have filed 49 claims with the International Centre for Settlement of Investment Disputes (ICSID) against Argentina. (1) Many of these claims originated from certain restrictive measures undertaken by the Argentine government in response to the nation's economic and financial crisis from 1999 to 2001. (2) Though Argentina claimed the emergency measures were necessary for the maintenance of public order, such measures "resulted in the greatest wave of claims by foreign investors against a single host country in recent history." (3)

Of those claims against Argentina that have been adjudicated, three tribunals awarded damages in excess of $100 million to the investor-claimants, which are among the largest awards granted by an ICSID tribunal. (4) Perhaps even more noteworthy than the amount of damages awarded are the conflicting interpretations of the necessity of Argentina's emergency measures as a response to the economic crisis. (5) In many of the claims against it, Argentina consistently raised the defense that it should be excused from liability for damages to foreign investments because of the "state of necessity" during its economic crisis, (6) otherwise known as a necessity defense. Argentina has argued for a necessity defense in claims brought by investors in many different industries, including infrastructure, manufacturing, and natural resources. (7) However, commentators and practitioners have taken a particular interest in a group of ICSID cases collectively known as the Argentine Gas Cases. (8) Each of the four claims was brought by a foreign corporation investing in Argentina's gas transportation and distribution industry; yet, each of the four tribunals issued a significantly divergent interpretation of the necessity defense claimed by Argentina. (9) While three of the four tribunals' awards share certain commonalities, ultimately finding Argentina liable for treaty violations despite its necessity defense, the fourth tribunal found in favor of Argentina. (10) Attempts at reconciling the different interpretations and conclusions of the awards regarding Argentina's necessity defense leave many questions unanswered. Further complicating matters, two of the three awards levied against Argentina were recently annulled with respect to Argentina's necessity defense. (11)

Awards by tribunals administered under ICSID may be annulled only in limited situations; (12) namely, where a tribunal is improperly constituted, fails to justify its decision, or displays "manifest excess of powers," corruption, or "serious departure from a fundamental rule or procedure." (13) With limited grounds for annulment, both the annulment decisions and awards in the Argentine Gas Cases differed as to the proper interpretation of the necessity defense under both the bilateral investment treaty between Argentina and the United States (the U.S.-Argentina BIT) (14) and under customary international law. (15)

The awards and corresponding annulment decisions issued in the Argentine Gas Cases have significant implications for the security of foreign investments and the legitimacy of international investment law and present policy concerns for states party to bilateral investment treaties. Prior to addressing these concerns, Part I aims to clarify the contextual background for the debate over the necessity defense. It first describes Argentina's political and economic climate and the relevant facts of the Argentine Gas Cases. It then discusses the necessity defense as claimed by Argentina to excuse its failure to comply with certain provisions of the U.S.-Argentina BIT. Part II addresses the different interpretations of the necessity defense provided by the tribunals in the Argentine Gas Cases in addition to those provided by the respective annulment committees that reviewed each case. Having established the context for the debate over the necessity defense, Part HI discusses concerns about the security of investor interests in foreign investment, inconsistencies in the awards and subsequent annulments, and related policy issues for states participating in the bilateral investment treaty system. …

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Understanding the Debate over Necessity: Unanswered Questions and Future Implications of Annulments in the Argentine Gas Cases
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.