The Origins of Argentina's Litigation and Arbitration Saga, 2002-2016

37 Pages Posted: 8 May 2015 Last revised: 6 May 2019

See all articles by Arturo C. Porzecanski

Arturo C. Porzecanski

American University - School of International Service

Date Written: May 13, 2015

Abstract

The voluminous and protracted litigation and arbitration saga featuring the Republic of Argentina (mostly as defendant or respondent, respectively) has established important legal and arbitral precedents, as illustrated by three cases involving Argentina which were appealed all the way up to the U.S. Supreme Court and were settled in 2014.

At first glance, the scale of Argentina-related litigation activity might be explained by the sheer size of the government’s 2001 default, the largest-ever up to that point. However, its true origins are to be found in the unusually coercive and aggressive way that the authorities in that country went about defaulting on and restructuring their sovereign debt obligations.

The mass filing of arbitration claims, in turn, was prompted by Argentina’s radical and seemingly irreversible changes to the “rules of the game” affecting foreign strategic investors, which clashed with commitments prior governments had made in multiple bilateral investment treaties.

In sum, a major deviation from best practices as understood and settled in the early 2000s, which codified how economic policy adjustments are to be made in a way that minimizes damage to the investment climate, preserves access to the international capital markets, and promotes rapid and sustainable economic growth, lies at the root of Argentina’s litigation and arbitration saga during 2002-2014.

Keywords: Argentina, default, debt, sovereign, litigation, arbitration, investor, holdout, ICSID

JEL Classification: E6, F3, F34, F51, F55, F59, F65, K4, N26

Suggested Citation

Porzecanski, Arturo C., The Origins of Argentina's Litigation and Arbitration Saga, 2002-2016 (May 13, 2015). Revised version published in Fordham International Law Journal, Vol. 40, No. 1, 2016; School of International Service Research Paper No. 2015–6 . Available at SSRN: https://ssrn.com/abstract=2602509 or http://dx.doi.org/10.2139/ssrn.2602509

Arturo C. Porzecanski (Contact Author)

American University - School of International Service ( email )

4400 Massachusetts Ave, NW
Washington, DC 20016
United States

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