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CYIL 7 ȍ2016Ȏ
its less outspoken counterpart, as it postulates by its exact wording the definition of the
limit of the arbitrators’ review with respect to non-precluded measures.
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3. Interpretation of NPM Clauses by Investment Tribunals
3.1 The Prelude to Argentinian ICSID Arbitrations
The latest Argentinian dreadful fiscal and currency crisis at the end of 2001 was an
overture that triggered out a lingering torrent of investment arbitrations, initiated on
the grounds of expropriation of foreign investments in Argentina. Massive financial
amounts awarded by ICSID tribunals, sufficiently capable of causing disruptions
in the state’s economy, are a bitter price to pay. It is submitted that Argentina takes
some portion of the blame for not being prudent enough when ignoring the global
economic recession, which repeatedly led to its sovereign debt skyrocketing, and
also for paying too much attention to the IMF advice,
72
when later promoting its
investment plan in a haphazard way.
While the Argentinian economic chagrin is usually connected with the Public
Emergency Law,
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adopted at the beginning of 2002, causing investors sharp shocks
immediately, the setting is not entirely accurate. To trace the origins of the last crisis,
it is necessary to dig deeper, beginning with the first out of three escalated economic
crises in 1982 with heavy debt as a courtesy of the recent war and a following high
devaluation of the national currency, which led to a severe currency exchange crisis.
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In spite of the looming crisis, several thorough reforms after 1989 stabilized the
country through the post-World War II like pegging of the Argentinian peso to the
U.S. dollar, with combined particles of the fixed exchange rates system and the gold
standard system surviving.
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Equally, privatization, targeted at the core of national
industry has brought its desired fruit with the flood of foreign investments, and
investors, being protected against all imaginable risks.
However, the policy of fully converting the peso to the US dollar proved to
be unsustainable in the long run due to various factors, influencing the global as
well as the national Argentinian economy. As a result, the latest economic crises at
the beginning of new millennium varied a great deal from the rosy economic view,
typical for the 1990s.
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National currency reserves almost diminished, the foreign
71
For instance Article 10 Section 1 of the US-Armenian BIT 1996:
The first paragraph of Article X reserves
the right of a Party to take measures
it regards as necessary
for the maintenance of public order, the
fulfilment of its international obligations with respect to international peace and security, or the protection of
its own essential security interests.
72
See
e.g.
SYKES, A.: Economic “Necessity” in International Law,
op. cit.
, p. 316.
73
The Public Emergency and Exchange Regime Reform Act Nº 25.561 2002 /Executive Order
No. 50/2002/.
74
KASENETZ, E.D.: Desperate Times Call for Desperate Measures,
op. cit
., p. 712.
75
HERDEGEN, T.:
Principles of International Economic Law,
OUP, Oxford, 2013, p. 14.
76
STONE SWEET, A.: Investor- State Arbitration: Proportionality’s New Frontier,
op. cit.,
p. 19.