The CMS Gas Transmission Company v. Argentina case was the first of a long line of Argentine financial crisis claims to reach a final award. Download PDF: Sorry, we are unable to provide the full text but you may find it at the following location(s): http://hdl.handle.net/1871/473... (external link) Two recent ICSID cases, CMS v. Argentina and LG&E v. Argentina, diverge on the application of necessity under customary international law. paras 1-2, 30-40, 41-56 [general guidance about annulment], 68-76, 81-85, 89-100 and 119-36) (a) the international obligation in question excludes the possibility of invoking necessity; or. On 3 October 2006, the Tribunal issued a Decision on Liability (the “Decision on Liability”), in which the Tribunal found the Argentine Republic (“Respondent” or “Argentina”) to be in breach of its obligations under the Bilateral Treaty between the United States of America and the Argentine Republic concerning the Reciprocal Encouragement and Protection of Investment (“BIT”, CMS claimed violations of the BIT with respect to expropriation and fair and equitable treatment. This interpretation can have the practical impact of permitting numerous different shareholders to bring claims against a single host state based on the same allegedly wrongful treatment of a single company. 328–329, Award). CMS Gas Transmission v Argentina, ICSID Case No. The Committee noted, however, that both parties had understood the award in that sense and, although the award could have been clearer, a careful reader could follow its implicit reasoning. Argentina argued that because TGN was the licensee, only TGN could claim directly for any damage suffered regarding its licence. CMS Gas Transmission Company v Argentina, ICSID Case no ARB/01/8, Decision of the ad hoc Committee on the Application for Annulment of the Argentine Republic paras. Reuters. ARB/01/8) (Annulment Proceeding) DECISION OF THE AD HOC COMMITTEE ON THE APPLICATION FOR ANNULMENT OF THE ARGENTIN… The LG&E tribunal affirmed that Argentina’s financial crisis amounted to a state of necessity. [2] Article XI of the BIT provides: “This Treaty shall not preclude the application by either Party of measures necessary for the maintenance of public order, the fulfillment of its obligations with respect to the maintenance or restoration of international peace or security, or the protection of its own essential security interests.”, Keep updated with the ITN newsletter or subscribe to our RSS feed, Investment Treaty News is an online journal published by the International Institute for Sustainable Development, ISSN 2519-8467 (English ed.) It held that each party should pay half of the arbitration costs and its own legal costs. Argentina applied for an annulment of the award, claiming that the Tribunal had manifestly exceeded its powers and failed to state the reasons for its decision. CMS lawyers work across sectors and borders in more than 40 countries worldwide to deliver advice to you wherever you operate. Azurix v. Argentina (II) 2003. I’m an Australian GP. The Annulment Committee upheld the Tribunal’s finding. The Tribunal decided that in this case the “fair market value” standard was Under the Gas Law, the national state-owned gas monopoly was divided into a number of companies to be privatized, one of which was Transportadora de Gas del Norte (TGN). Pursuant to the approach taken in this case, a minority shareholder has a direct right of action against the host state that can be asserted independently from the rights of the company itself, provided that the relevant treaty’s definition of “investment” includes equity, stock or shares in a company. The decision of the ad hoc committee provides a clear illustration of the distinction between appeals on points of law, and … By 1999, CMS Gas Argentina, a wholly owned subsidiary of claimant CMS Gas Transmission Company (CMS), a United States company, had purchased close to 30 per cent of TGN’s shares. Country: Argentina. 359, Award). Decision of the Tribunal on Objections to Jurisdiction. In January 2000 and again in July 2000, the representatives of the gas companies agreed, subject to certain conditions, to defer the adjustment of the gas tariffs in accordance with the US–PPI. US appeals court rejects set-aside of Argentina award, dismissing concerns over alleged ties between investor and arbitrator Gabrielle Kaufmann-Kohler Jul 3, 2018. BUENOS AIRES: Alejandro Sabella, the coach who took Argentina to the World Cup final in 2014, has died aged 66 after years of battling with cancer and heart problems. CMS Gas Transmission Company v. The Republic of Argentina. (function(i,s,o,g,r,a,m){i['GoogleAnalyticsObject']=r;i[r]=i[r]||function(){ In contrast, the Committee held that an umbrella clause that requires a host state to observe “any obligations it may have entered into with regard to investments” is concerned with consensual obligations with regard to particular persons, not obligations erga omnes. CMS Accessibility & Nondiscrimination for Individuals with Disabilities Notice Home A federal government website managed and paid for by the U.S. Centers for Medicare & Medicaid Services. In particular, an annulment committee is not an appeal mechanism and it has no power to correct manifest errors of law, even where it recognizes these. The Tribunal then stated that although not excusing liability or precluding wrongfulness, the crisis ought to be considered when determining compensation (paras. From getting an instant quote for specific commodities to improving your shipment dashboard… Argentina's government is seeking higher taxes on agricultural exports and to tax foreign assets held abroad, the economy minister said on Tuesday. Argentina (defendant) petitioned for annulment of an award that an ICSID tribunal had mandated Argentina to pay to CMS Gas Transmission Company (plaintiff), where the tribunal made its decision based on the premise that the definition of necessity in Article XI of the U.S.-Argentine Bilateral Investment Treaty (BIT) was the same as the definition based on customary international law as … CMS commenced arbitration proceedings against Argentina at ICSID under the United States–Argentina Bilateral Investment Treaty (BIT) regarding the actions taken in 2000 to defer the application of the US–PPI to gas industry tariffs, Argentina’s Emergency Law and other measures adopted during the crisis. Second, the Tribunal did not examine whether the conditions laid down by Article XI were fulfilled (paras. Argentina objected to jurisdiction on the ground that Article 25(1) of the ICSID Convention covers “any legal dispute arising directly out of an investment” and that CMS was claiming not for direct damages but for indirect damages resulting from its minority shareholding in TGN after TGN suffered damage regarding its licence. The Tribunal decided that in this case the “fair market value” standard was Privacy Policy, International Challenges in Investment Arbitration, International Institute for Sustainable Development, Challenges to awards—ICSID annulment proceedings—standard for annulment, Jurisdiction—definition of “investment”—minority shareholders. This article discusses the decisions of the Arbitral Tribunal and the ad hoc Committee in CMS v Argentina, focusing on the conditions imposed by the Argentina–United States bilateral investment treaty and by customary international law, as well as on the relationship between the two sources. })(window,document,'script','//www.google-analytics.com/analytics.js','ga'); ]]>, Expert Opinion of Prof. Jose E. Alvarez (not public), Expert Opinion of Dean Anne Marie Slaughter (not public), See case mapped in Subject Navigator on Investor-State LawGuide, See discussion and analysis of the case on IAReporter, Decision of the Tribunal on Objections to Jurisdiction, Application for Annulment and Request for Stay of Enforcement of Arbitral Award, Decision on the Argentine Republic's Request for a Continued Stay of Enforcement of the Award (Rule 54 of ICSID), Decision of the ad hoc Committee on the Application for Annulment of the Argentine Republic (English), Decision of the ad hoc Committee on the Application for Annulment of the Argentine Republic (Spanish), Petition for an Order Confirming Foreign Arbitral Award and Entering Judgment Thereon, Memorandum Opinion & Order, United States District Court Southern District New York, Enforcement Decision by the US Court of Appeals. ARB/01/8. CMS v. Argentina CMS Gas Transmission Company v. The Argentine Republic (ICSID Case No. We see ourselves as more than just legal advisers. 315–324, Award). The Tribunal held that Article 25 of the International Law Commission’s Draft Articles on State Responsibility reflected customary international law on necessity. In the final episode with only two co-hosts, we call up GDPR oracle Emily Hay for a discussion on how the data protection directive GDPR comes into play in international arbitration. 266–269, Award). The Tribunal also held that Argentina had breached the umbrella clause in Article II(2)(c) of the BIT, which required Argentina to observe “any obligations it may have entered into with regard to investments.” It held that there were two stabilization clauses contained in the licence, namely provisions not to freeze the tariff regime or subject it to price controls and not to alter the basic rules governing the licence without TGN’s written consent. 130–132, Annulment Decision). 68–76, Annulment Decision). ), © The Tribunal accepted that the guarantees given in the legal framework regarding the tariff regime were crucial for the investment decision and that the measures complained of did, in fact, entirely transform the legal and business environment under which the decision to invest and the investment were made. 7500 Security Boulevard, Baltimore, MD 21244 Notwithstanding the identified errors, the Tribunal had applied Article XI of the BIT, albeit cryptically and defectively. ... Isro launches India’s 42nd communication satellite CMS-01 . 90–94, Annulment Decision). 95, Annulment Decision). It also enacted various new laws, including a 1991 Currency Convertibility Law, a 1991 Decree pegging the Argentine currency to the United States dollar and a 1992 Gas Law establishing the legal framework for the privatization of the gas industry and regulation of the transport and distribution of natural gas. So, it’s fair to say life has taken a dramatic turn over the past few years. The Tribunal rejected CMS’s claims on expropriation, but ruled that Argentina had breached its obligations on fair and equitable treatment and the umbrella clause (by violating stabilization clauses in a licence). The Tribunal awarded CMS US$133.2 million and gave Argentina the option to purchase all CMS’s shares in TGN by payment of a further US$2.148 million within one year. Related Capabilities. The Tribunal held, however, that a BIT is clearly designed to protect investments at times of economic difficulties or other circumstances leading to adverse measures by the government and that, in the absence of such profoundly serious conditions as total collapse, the BIT would prevail over any plea of necessity. To set a reading intention, click through to any list item, and look for the panel on the left hand side: In late 2001, the crisis deepened and, on 6 January 2002, a law declaring a public emergency was passed. CMS v. Argentina, ICSID case brief summary, 2005 (U2 415) FACTS: Argentina, in the early ‘90s takes neoliberal policy stance. The CMS Annulment Committee’s decision is important in a number of respects. Under the Emergency Law, the right of licensees of public utilities to adjust tariffs according to the US–PPI was terminated, as well as the calculation of tariffs in dollars. How do I set a reading intention. I’m also married to a U.S. military member. The Committee held that the Tribunal had correctly decided that it had jurisdiction to decide CMS’s claim and that the Tribunal had not manifestly exceeded its powers when considering CMS’s claim regarding breach of fair and equitable treatment. 266-284, especially at 274-276 and 282-284 The Committee noted that it seemed that the Tribunal may have accepted CMS’s reasoning, but the award did not address this expressly (paras. It held that the effect of an umbrella clause is not to transform the relied-upon obligation into something else; the content of the obligation is unaffected and likewise the parties to the obligation (i.e., the persons bound by it and entitled to rely upon it) are not changed. On 8 September 2005, the Argentine Republic (Argentina) filed with the Secretary-General of the International Centre for Settlement of Investment Disputes (ICSID) an application in writing, requesting the annulment of an Award dated 12 May 2005 rendered by the Tribunal in the arbitration between CMS Gas Transmission Company (CMS) and the Argentine Republic. CMS v Argentina, Annulment Decision ( (esp. 330–331, Award). CMS), an entity incorporated in the United States of America, a Request for Arbitration against the Argentine Republic (Argentina). Very similar approach and language is found in LG&E v Argentina, ICSID Case No. (i[r].q=i[r].q||[]).push(arguments)},i[r].l=1*new Date();a=s.createElement(o), Autores: R. Doak Bishop; Localización: Europaisches wirtschafts und steuerrecht, ISSN 0938-3050, Vol. 2020 International Institute for Sustainable Development CMS v Argentina, ICSID Case No.
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