CYIL Vol. 7, 2016

KATARÍNA CHOVANCOVÁ CYIL 7 ȍ2016Ȏ the fact that nowhere in Article XI of the US-Argentina BIT may its effect be found, lest an exclusion of the compensation obligation. For instance, according to Desierto, 51 although the state has every right to adopt the necessary measure under the relevant NPM clause, it is not entitled “to cause exculpation from specific liability for compensation owed to the foreign investor.” Equally, Sykes 52 pragmatically makes diminishing of the compensation obligation depending on the wording of the NPM clause in the BIT: “Only if a compensation requirement itself ‘precludes’ a ‘necessary’ measure does the text seem to rule out compensation” . 53 Apparently, many of the inadequacies in recent interpretation of the concept of necessity in the US-Argentina BIT and, more generally, that of NPM clauses and their relationship with the CIL necessity have been already observed in numerous legal writings. An international debate oscillated mainly around a possible incorporation of some (or all) elements of the CIL necessity, while the nature of NPM clause in Article XI as self-judging, or not self-judging was discussed as well. However, it is “the most controversial interpretive methodology” , 54 applied to the concept of treaty based necessity defence by arbitral tribunal in the Continental Casualty case, which seems to be an issue of real ideological contest. If not being underrated at the press of a button, at the very least prudence in applying the WTO weighing and balancing test is highly recommended to investment tribunals for an omniscient fear of transplanting into the international investment law too much of the WTO law. 55 In contrast, the reverse side of the “Continental” spectre of divided opinions incorporates more neutral views, with authors only noticing the reliance of arbitrators in Continental on the WTO doctrine of necessity. For instance, as Reinisch 56 observes, the Continental case “may be regarded as a first example of adjudicatory cross-fertilization in international economic law.” Of significance in this respect are also exceptional flattering annotations, as that made by Stone Sweet: 57 “…what is important is that the Tribunal adopted a mature form of proportionality analysis, the version developed by the GATT panels and the AB…” Finally, these views are accompanied by the globalization recognizing approach, which fully conforms to a gradual convergence of international investment and trade. 58 51 DESIERTO, D.A.: Necessity and Supplementary Means of Interpretation, op. cit ., p. 908. 52 SYKES, A.: Economic “Necessity” in International Law, op. cit. , p. 321. 53 It is clear that the same method will be applied to a less sensitive issue of the resting residual liability of the host state toward foreign investors. See in detail BURKE-WHITE W., VON STADEN A.: Investment Protection in Extraordinary Times, op. cit ., p. 388. 54 DESIERTO, D.A.: Necessity and Supplementary Means of Interpretation, op. cit ., p. 864. 55 JUNG, Y., HAN, D.: Sovereign Debt Restructuring, op. cit ., p. 95. 56 REINISCH, A.: Chapter 6: Necessity in Investment Arbitration, op. cit. , p. 152. 57 STONE SWEET, A.: Investor-State Arbitration: Proportionality’s New Frontier, op. cit. , p. 23. 58 PUIG, S.: The Merging of International Trade and Investment Law, Berkeley Journal of International Law, 2015, Vol. 33, No. 1, pp. 1-59.

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