Investment Policy Brief 2, July 2015

Crisis, Emergency Measures and the Failure of the ISDS System: The Case of Argentina

This brief gives an account of Argentina’s experience with investor-state dispute settlement in 2001-2014. Between 2002 and 2007, Argentina was the subject of a quarter of all the cases initiated within the framework of the International Centre for Settlement of Investment Disputes (ICSID) Convention. These cases were triggered by changes within the regulatory framework for international investments –particularly in sectors related to the provision of public services– as a result of the implementation of a package of measures aimed at tackling one of the worst economic crises in Argentina’s history.

The paper focuses on three main aspects of this experience:

1. the extraordinary situation that triggered the flood of claims against Argentina, and the sheer size of the compensations that Argentina would have had to face if all those claims had been successful;
2. the current status of all the cases initiated against Argentina and its performance in dealing with these cases; and
3. the difficulties and limitations encountered by arbitral tribunals when tackling the particular circumstances of the Argentinian case, especially when trying to scrutinize the economic policy choices made by the government.

The new investment policy brief series by the South Centre focuses on developing country experiences with international investment treaties and the investor-state dispute settlement (ISDS) mechanism. This policy brief series also tackles lessons learned from ISDS cases, including how international investment agreement provisions have been approached and interpreted by arbitral tribunals.

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