Towards Greater Doctrinal Clarity in Investor State Arbitration : The CMS, Enron, and Sempra Annulment Decisions
Series
Law and Economics Research Paper Series
Type
discussion paper
Date Issued
2010-11-11
Author(s)
von Staden, Andreas
Abstract
Several arbitral awards rendered against Argentina under bilateral investment treaties and related to the country's devastating economic crisis in 2001-2002 restrictively interpreted Argentina's ability to rely on either the exception clause in the US-Argentina investment treaty or the necessity defence under customary international law. In three cases (CMS, Sempra, and Enron), the tribunals, by simply equating the requirements under the treaty exception with those of the customary necessity defence, all but ignored established canons of treaty interpretation and engaged in doctrinally muddled analyses of the relationship between treaty law and customary law. All three awards have since been subject to annulment decisions by ICSID ad hoc committees. While the decisions disagree on what constitutes an appropriate reason for annulment under the manifest excess of powers ground, they offer doctrinally much improved approaches to the interpretation and application of both treaty exceptions and the necessity defence. Identifying the proper dividing line between permissible annulment review and impermissible appellate review in such contexts has been, and will remain, contentious, but the Sempra and Enron committees offer reasonable assessments of when an error of law becomes so grave as to result in actual failure to apply the proper law.
[http://ssrn.com/abstract=1725909 Paper available at SSRN]
[http://ssrn.com/abstract=1725909 Paper available at SSRN]
Language
English
Keywords
Argentina
ICSID
necessity
annulment
manifest excess of powers
failure to apply the proper law
HSG Classification
contribution to scientific community
Refereed
No
Publisher
University of St. Gallen Law School
Publisher place
St. Gallen
Number
13
Start page
18
Subject(s)
Division(s)
Eprints ID
71744