Revisiting the Necessity Defense

Abstract:     
In several cases that arose out of Argentina’s economic crisis 2001-2002 tribunals have provided divergent interpretations of the relationship between the ‘essential security’ exception contained in Article XI of the US-Argentina bilateral investment treaty and the customary international law defence of necessity. The tribunal in Continental Casualty v Argentina provided a new understanding that is guided by the WTO’s approach under GATT Article XX. This chapter considers the justification advanced by the tribunal for this approach and the legal and systemic issues it raises. It finds the turn to WTO law for purposes of interpreting the ‘essential security’ clause to be deeply flawed for textual, teleological, and systemic reasons. Alternative legal methodologies that the arbitrators should have considered instead are suggested.

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