Question 3. Should the system of investor – state arbitration be reformed to include an appellate mechanism? When taken into consideration, the system of investor – state arbitration has suffered, throughout the years, from a lack of consistency between ICSID tribunals, considering that ICSID has been the main tool for conflict resolution regarding investment disputes. Under this perspective andwhether or not an appellate mechanism should be implemented, we must first analyze the whole context behind the functioning of the system of investor – state arbitration. The ICSID was created under the World Bank structure in 1996 and was instantly know by its investment disputes arbitral rules and published decisions, despite the previous existence of other ad hoc tribunals and institutions likeUNCITRAL. Therefore, it can be affirmed the importance of the role played by the ICSID in this context. When discussing the lack of consistency between ICSID tribunals, Argentina’s financial crisis in early 2000’s must be mentioned and explored because it was of great reputation within the international community As a consequence of a monetary policy of “currency peg” and its unsustainability inthe end of 1999, there was political instability, a “run to the banks” because of other states shaken confidence and, finally, in 2002, the abolishment of the currency peg. Argentina had, at that time and due to the established financial crisis, infringed several investors’ rights, as established in previous investment agreements, which led to a series of arbitral disputes. And, as a result ofthese disputes, their outcomes came in very distinct and incoherent ways that made the international community question the functioning of arbitral decisions regarding BITs.
Still on Argentina’s past situation, it can be affirmed that the main issue with the regarding arbitral decisions was its claim of “necessity” in order to defense and consequently avoid the investment treaties liability, whatactually opens the question of whether there should be revision of such decisions or not. To better understand this claim, we must look into the cases of arbitral disputes Argentina faced at the time. On one hand, and as the first important case on the matter, there was CMS v. Argentina1, in which the “necessity theory” was denied by the court under the fundaments that the applied measures wereadopted to safeguard essential economic interests. On the other hand, there was the LG&E v. Argentina2 in which the “necessity” claim was accepted. ICSID considered that, under the provisions of Article XI of the 1991 Argentina - US BIT, the measures implemented were necessary in order to maintain public order or to protect the most essential security interests of the country, mentioning that therewere no other available means to effectively respond to the crisis at the time. Regarding the outcome of the decisions, Argentina submitted the CMS decision to an annulment committee that actually was able to admit that the decision didn’t analyze the exception of “necessity” as established in Article XI. From this perspective we can see that the annulment committee actually said that theoriginal committee was unable to apply the law in a correct manner and, even though it recognized the mistake, it wasn’t able to take any proper measures in order to review the decision due to its lack of powers to do so. This situation shows us that not only we have some serious lack of consistency in the decision making process as a lack of any sort of organisms or mechanisms in which such decision canbe submitted and reviewed or fully annulled.
Ler documento completo
Por favor, assinar para o acesso.