CYIL Vol. 7, 2016

CYIL 7 ȍ2016Ȏ NON ǧ PRECLUDEDMEASURES IN INTERNATIONAL INVESTMENT ARBITRATION debt ballooned and Argentinians – with most of the nation unemployed – lived just one step above the poverty line. Riots followed, as well as an insane swirl of five presidents in three weeks. The Public Emergency Law subsequently made a swift end to the doom – at least up to certain extent, by enacting three drastic reforms. Firstly, the new law effectively eroded any habitually expected periodic adjustments of tariffs in concession contracts that foreign investors might have by freezing of tariff rates and bank accounts. 77 Secondly, the financially exhausting convertibility mechanism blew up instantaneously with the significant devaluation of the Argentinian peso against the US dollar. The market had firstly seen the financial value of the peso falling sharply. From the one-to-one rate, the peso finally levelled off at the three-to-one rate to the detriment of the dollar because of the simultaneous pesification of Argentinian financial commitments toward all foreign investors without discrimination. Indeed, the pesification in the process of consolidation of the Argentinian economy was the last straw from the viewpoint of investors. Their revenues decreased considerably, because they were able to bill their customers in Argentina only at the previous one- to-one rate. 78 Undoubtedly, the aimbehind the Public Emergency Lawwas a gradual consolidation of the national economy. However, the heydays of multinational corporations in Argentina were over, and the patience of foreign investors evaporated. Several dozens of claims have been filed hitherto in various ICSID arbitrations against Argentina with the prospects of facing up to ten billions of US dollars worthy liability. As for the current chances of recovery of the Argentinian economy, notwithstanding occasional circumventions and obstructions of the verdicts of ICSID tribunals, they are not particularly optimistic. 3.2 CMS, Sempra, Enron and LG&E –Two Peas in a Pod Created by Accident Argentina has built its defences in ICSID arbitrations basically on two arguments. An invocation of the BIT necessity, expressed in the NPM clause was followed by the second argument, excusing broad economic reforms on the grounds of preclusion of their wrongfulness under the CIL necessity doctrine. 79 As mentioned earlier in this article, ICSID tribunals in five notoriously famous cases came up with three modes of mixed interpretation of the NPM clause’s applicability, while either rejecting or partially accepting the arguments put forward by Argentinian legal counsels.

77 BURKE-WHITE W.: Part IV Chapter 17: The Argentine Financial Crisis, op. cit ., p. 410. 78 They might charge only one peso for one dollar, instead of three pesos. 79 BURKE-WHITE W.: Part IV Chapter 17: The Argentine Financial Crisis, op. cit ., p. 411.

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