American Journal of International Law, Vol. 105, 2011
11 Pages Posted: 12 Jul 2011 Last revised: 18 Aug 2015
Date Written: 2011
This article analyzes the decision of the International Centre for Settlement of Investment Disputes in Sempra Energy International v. Argentine Republic. The arbitral tribunal had found that the violations by Argentina of its investment obligations were not excused by reasons of necessity under customary international law or the United States–Argentina bilateral investment treaty (BIT). The committee held that the tribunal had manifestly exceeded its powers by committing a manifest error of law, that is, by equating the BIT necessity provisions with those under customary international law.
The Sempra annulment decision threatens to undermine such security for all future investments. The common interest underpinning international investment law is economic development through foreign investment for capital-importing states and security of such investment for private actors in capital-exporting states. The demand for security of investment drove the founding of the ICSID system and explains its extensive caseload - over one hundred pending cases with total amounts in dispute exceeding $30 billion - as well as the widespread popularity of bilateral investment treaties, currently numbering more than twenty-five hundred.
Suggested Citation: Suggested Citation
Szewczyk, Bart M.J., Sempra Energy International v. Argentine Republic (2011). American Journal of International Law, Vol. 105, 2011. Available at SSRN: https://ssrn.com/abstract=1883852