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CYIL 7 ȍ2016Ȏ NON ǧ PRECLUDEDMEASURES IN INTERNATIONAL INVESTMENT ARBITRATION
necessity, existing side by side in customary international law and in treaty-based
regimes, including the regime within the frame of international investment law.
Starting with the customary international law, the threshold for the successful
plea of necessity under Article 25 of the ILC Draft Articles is almost insurmountably
high. When it is being passed, an unlawful measure taken by the state while infringing
on its international obligation in order to protect its own essential interests against
grave and imminent danger in exigent circumstances will be excused against otherwise
sufficiently grounded claim of those afflicted by it.
32
Quite apart from the grave intricacies of the CIL necessity doctrine, the concept
of necessity expressed in BITs has a positive meaning – at least for the state, taking
a necessary measure under the NPM clause, being permitted to do what needs to be
done without overdramatizing an event by need for excuse. Consequently, it is submitted
that the dynamic concept of necessity in a treaty regime must be perceived from
different angles, instead of that of the CIL necessity doctrine’s shadowy permutation.
The real issue is that a discomforting aspect of the treaty based necessity has
arisen due to a haunting effect of embellishing the nexus requirement of necessity in
BITs and the CIL necessity concept in international investment arbitration. The very
fact that the interpretation of the nexus seems to be a conundrum in several ICSID
cases does not mean that ICSID arbitral tribunals did not attempt to solve it many
times. However, as Jung and Han
33
observed, all they came up with were
“conflicting
interpretations and applications of the law concerning the treaty state of necessity defence,
especially vis-à-vis the meaning of what constitutes necessary in the context of ISD.”
Virtually, three modes of interpretation were created about the concept of necessity
defence in BITs. The first mode of interpretation with subtle variances was invented
in
CMS
,
Sempra
and
Enron
arbitrations
34
against Argentina. According to their
interpretation of the doctrine of necessity, enacted in NPM clause in Article XI of
the US-Argentina BIT,
35
the treaty based necessity is similar to the CIL necessity,
which means that interpreting the Article XI, based on Articles 31 and 32 VCLT
36
may be comfortably dispensed with, and the primacy of the treaty may be flagrantly
disregarded.
37
32
For detailed explanation see HENCKELS, C., MITCHELL, A.D.: Variations on a Theme,
op. cit
., p. 97.
33
JUNG, Y., HAN, D.: Sovereign Debt Restructuring under the Investor-State Dispute Regime,
Journal
of International Arbitration
, 2014, Vol. 31, No. 1, p. 91.
34
See
e.g.
KASENETZ, E.D.: Desperate Times Call for Desperate Measures,
op. cit
., p. 730.
35
US-Argentina Bilateral Investment Treaty 1994. Under Article XI,
“This treaty shall not preclude the
application by either Party of measures necessary for the maintenance of public order, the fulfilment of its
obligations with respect to the maintenance or restoration of international peace or security, or the Protection
of its essential security interests.”
36
The Vienna Convention on the Law of the Treaties 1969.
37
See
e.g.
STONE SWEET, A.: Investor- State Arbitration: Proportionality’s New Frontier,
Faculty
Scholarship Series
, Yale Law School, 2010, Paper 69, p. 21.