The Argentine cases : a shadow on ICSID arbitration?

The World Bank's International Centre for the Settlement of Investment Disputes (\ICSID\") is frequently nominated for the resolution of investment disputes in bilateral investment treaties (\"BITs\"). Despite this investment treaty arbitration under ICSID has not been frequently used. In 2000-2001 the Republic of Argentina suffered a severe economic crisis. In the wake of this crisis over forty foreign investors instituted proceedings against Argentina before ICSID for breach of BIT obligations with an estimated value of over US$30 billion (the \"Argentine Cases\"). This thesis examines the first awards in the Argentine Cases and assesses the impact of these awards on the future development of ICSID arbitration. Three major concerns arise from the analysis of the early awards. Firstly the inconsistency between tribunals' interpretation and application of international law principles has resulted in conflicting awards regarding Argentina's key defence of necessity. Secondly the Argentine Cases demonstrate that the limited procedural grounds for annulment available under ICSID pose significant challenges to the adequacy of the annulment procedure. This contributes to arguments for the development of an appeal facility for ICSID awards. Finally Argentina's resistance to complying with ICSID awards in the Argentine Cases tests the compliance and enforcement mechanisms under ICSID and challenges Argentina's obligation to comply with its international obligations. The avoidance of obligations under ICSID awards may establish an unfavorable precedent of non-compliance in ICSID arbitration. The implementation of a response to these issues in the remaining Argentine Cases will have a significant impact on how the cases affect ICSID's development. The Argentine Cases have elevated awareness of ICSID and BIT protection and will influence both states and investors in their assessment of the costs and benefits of allowing recourse to or relying on ICSID arbitration. This thesis argues that the impact of the Argentine Cases on the development of ICSID arbitration will depend on how the remaining Argentine Cases address the concerns raised in this thesis."