Foreign Investment and Measures Adopted on Grounds of Necessity: Towards a Common Understanding
Transnational Dispute Management, Vol. 7, No. 1, 2010
29 Pages Posted: 19 Feb 2011
Date Written: April 2010
Abstract
During the grave economic crisis that hit Argentina between 1999 and 2001, the Argentine government adopted a series of drastic measures which adversely and substantially affected inter alia foreign investment. These measures generated a stream of claims by foreign investors concerning alleged violations of obligations stemming from bilateral investment treaties (BITs). The paper discusses how ICSID tribunals have dealt with these necessity pleas with a view to identifying common patterns and divergences on the main substantive and procedural issues. It focuses first on the legal nature of Article XI and Article 25 of the Draft Articles on State Responsibility prepared by the United Nations International Law Commission (hereinafter Draft Article 25) as expression of customary international law, as well as their co-ordination. It also briefly discusses the alleged self-judging character of Article XI and then examines and compares the conditions that need to be satisfied in order to adopt measures on grounds of necessity under Article XI and customary international law.
Keywords: foreign investment, necessity, state responsibility, arbitration
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