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  Félix Peña

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 ICSID | Noviembre de 2004

The role of ICSID in investor-state dispute resolution: lessons from the "Argentinean Cases"

Félix Peña is member of the ICSID Panels of Conciliators and of Arbitrators. The author wants to thank Martin Furlong and Julian Peña for their collaboration in the preparation of this article.


Dispute settlement mechanisms and relevant experiences with their application have been developing actively in recent years both in the field of international trade and foreign direct investment (FDI).

In the field of international trade, the creation of the World Trade Organization (WTO) introduced a substantial improvement with respect to the previous GATT period (1). As the result of what Professor John Jackson has called a "rule based system," (2) the WTO has developed a multilateral systemic approach to solving differences among its member countries. At WTO, both rules and dispute settlement mechanisms are part of the same system. They reinforce each other.

Such systemic approach can also be observed in some of the multiple trade preferential agreements concluded within the WTO global system. The North American Free Trade Area (NAFTA) is a concrete example, among others. In NAFTA, rules and dispute settlement mechanisms regarding trade are part of the same system. In addition, some of the preferential agreements include rules and dispute settlement mechanisms related to foreign investment within the economic space covered by the agreement. This is the case of NAFTA and of several more recent free trade agreements (FTAs) concluded by the United States with individual or group of countries, such as the U.S.-Chile FTA and the U.S.-Central America countries FTA (3).

In the field of international investment, on the contrary, the idea of a multilateral systemic approach has until now failed. The most recent initiative in this regard within the framework of WTO has not received the support of a sufficient number of countries. It seems that the issue will not be included in the Doha Development Agenda, at least in the actual round of trade negotiations. Therefore, in the field of international investment, for now, rules and dispute settlement mechanisms are embedded in different legal instruments. Substantive rules are generally included in bilateral investment treaties (BITs), which normally contain references to the applicable dispute settlement mechanisms. More than 2,000 of this kind of treaties have been concluded, most of them in the last ten to twenty years. Dispute settlement mechanisms are generally established by separate international agreements. The most important institutional framework for international investment dispute resolution is the International Centre for the Settlement of Investment Disputes (ICSID).

One could observe that there have always been debates, very strong at times, regarding the efficacy, and even the legitimacy, of the international trade and investment dispute settlement mechanisms. The most recent of such debates concern what is already possible to call the "Argentinean case" at ICSID. This debate has been generated by the accumulation of a significant number of arbitration cases brought to ICSID by foreign investors against Argentina as a consequence of the economic measures adopted by the Government in early 2002, after the collapse of the "currency board" policy.

Some preliminary questions that could be raised by the "Argentinean case" at ICSID

Since the collapse of the Argentine monetary system at early 2002, with strong side-effects on most of its economic activities, a large number of arbitration cases have been brought against Argentina before ICSID. Their number has increased in the last year. At the end of June 2004, 29 cases were on the list of ICSID "pending cases." They represented forty percent of the number of pending cases and almost fifty percent of the number of the new cases that were open in this international forum since January 2003 (4).

Some very preliminary estimations consider that the Argentinean tax-payers will have to pay an amount of about 15 billion dollars in order to settle these claims. However, with the available information at this early stage of the proceedings, it would not be possible to precisely determine the real value of the compensations that could result from those claims - assuming they are successful for the claimants and the resulting awards are effectively enforced.

Most of those claims seem to be related to the impact on some foreign investors of the economic measures adopted by the Government of Argentina, which, due to their general nature, had a strong negative impact on local investors and citizens as well. At the same time, it would be difficult to imagine what kind of economic and social - even political - scenario would have resulted if the Government did not adopt those emergency measures early 2002.

Many local and foreign economic analysts forecasted - most of them privately - some years before the January 2002 collapse that mainly as a result of the fiscal policies applied in Argentina, the "currency board" system was due to fail. Certainly, some months before the end of the Fernando de la Rua Government, this scenario was generally considered as the most probable, even if almost nobody recognized publicly that it was desirable (5).

When the new Government of Argentina adopted those measures, its main argument was that they were required as a matter of an economic emergency. The Government considered them as a necessary public policy to avoid a most catastrophic scenario with large social consequences and, eventually, leading even toward the collapse of the democratic political system (6).

To recall this is important keeping in mind the fact that, at least until July 2004, almost all the foreign investors that have brought legal claims against Argentina preserved their original business activities in the country. To put it in a more colloquial way, the fact that they continue to operate in the country could be interpreted as an implicit recognition that life was possible after the disaster.

The international newspapers of that period reflected the concerns about the possible impact of an catastrophic scenario in Argentina over other South American countries, particularly Brazil. This was also a major concern for many other Governments, including those of the OECD countries, and also of the international financial institutions.

If that had been the case - leaving aside other political and social effects - the business interests of many foreign investors in those South American countries would have been also adversely impacted. It is necessary to recall, that some of the foreign investors in Argentina had significant investments and business interest in Brazil and other countries of the region.

As mentioned above, most local and foreign analysts attached in those days a high probability to what was precisely perceived as a catastrophic scenario. Some leading international economists even found a strong similarity between the Argentinean situation and the economic collapse of Austria at the end of the First World War. They suggested the need of the same kind of international intervention that was required in the Austrian case.

The fact is that the catastrophic scenario was avoided. The democratic political system was preserved. A new government was elected early 2003. It is possible to consider that the economic emergency measures adopted early the year 2002, perhaps contributed to this outcome.

Our main idea in this article is not to analyze the legal merits of the cases brought against Argentina by foreign investors. On the contrary, the idea is only to raise some questions about what this accumulation of cases could imply from the point of view of the ICSID's role in investor-State dispute settlement.

The main elements of the "Argentinean case"

As mentioned above, the "currency board" system of Argentina collapsed in early 2002, as a result of an economic and political process that culminated in a dramatic way at the end of 2001 with the resignation of the President Fernando de la Rua. Since then, some 29 cases against the country have been registered with ICSID by foreign investors claiming damages suffered as a consequence of these economic measures adopted by the Argentine Government (7). Most of these cases relate to investments in the electricity, water and oil and gas industries and services. It could be expected that further cases related to the same measures might also be filed in the future.

In most of those cases, foreign investors complain that the economic measures that were adopted by the Argentine Government constituted violations of their legal rights originated in BITs concluded by Argentina during the 1990s (8). The Argentine Government opposes these arguments (9).

In the 1990s, Argentina signed and ratified 51 bilateral investment agreements (10), both with developed and developing countries (11). All of these agreements contain international commitments regarding the foreign direct investment public policies (12). Also, all of them contained different variations of the typical clauses on foreign investment protections and they also established dispute resolution provisions that allow the access to investor-State arbitration (13). Not all of these agreements are identical, even if they have strong similarities (14). But all of them are in some way linked through their most-favored-nation clauses, and they have also included the acceptance by Argentina of the investors' access to the ICSID arbitration mechanisms; among the other options were the ICC arbitration and ad-hoc arbitration under the UNCITRAL rules (15).

Most of the BITs concluded by Argentina also typically establish a "cooling-off period," for consultations and negotiations between the concerned foreign investor and the Government prior to bringing the case to arbitration (16). The duration of such a "cooling period" is not the same in all of the agreements.

At the time of conclusion of this article, all of the Argentinean cases at ICSID remain pending (17).

The role of ICSID and the global network of BIT's: challenges raised by the "Argentinean case"

Through the last two decades a strong functional link has been developed between the ICSID system of dispute settlement (18) and the global network of BITs (19). This link has been based on the introduction by most BITs of the ICSID arbitration option in the provisions concerning dispute resolution between foreign investors and host States (20).

ICSID provides an option of a specialized, institutional forum for the settlement of disputes related arising out of international investment.

As mentioned earlier, the global network of BITs provides substantive and procedural rules, but normally not the forum to solve the resulting international investment disputes. If necessary, the BITs derive the detailed dispute resolution rules from some of the institutional arbitration mechanisms - for example ICSID or ICC - or from the UNCITRAL Rules for ad-hoc arbitration.

The situation was different when ICSID was created in 1966 (21). Very few BITs have been concluded since the first such agreement was signed in 1959. At that moment, the trend toward the expansion of the network of BITs was not even considered in the most optimistic of the possible scenarios (22). On the contrary, the prevalent policy in most developing countries was against the idea of accepting the possibility that a sovereign State could submit to a foreign jurisdiction in a dispute with an international investor (23). Clearly this was the predominant position of most Latin American countries, including Argentina. The Calvo clause was yet prevailing in relation with foreign investments policies.

Things began to change in the 1980s (24). The large expansion of the network of BITs accelerated during the 1990s (25). It went well beyond the original interest in protecting international investments in, for example, oil and mining activities in developing countries (26).

One factor that contributed to this expansion in the 1990s was the privatization process in many developing countries, particularly, of public utilities enterprises and services. Argentina was in this sense a notorious case. This partly explains most of the large foreign investment in the country on those years (27).

Developed countries did not consider that customary international law, not even existing bilateral trade agreements, were sufficient to protect their investors (28).

This concern was stimulated by at least three factors:

  • the development of international networks of production and trade all over the world;

  • the failure of the initiatives leading to the creation of a multilateral system for international investment (29), and

  • the pressure of the multinational firms with worldwide production facilities, interested in overcoming what they perceived as inefficient jurisdictional institutions in most developing countries (30).

Many developing countries, for their part, were willing to attract foreign direct investors and for that reason they concluded most of the new BITs with OECD countries and even among themselves (31). Eastern European countries also participated in this development even before the collapse of their socialist regimes (32).

The conclusion of BITs was perceived by developing countries as a way to improve their capacity to compete in the attraction of necessary foreign investments. They wanted to overcome the deterrent effect on foreign investors of memories for their past failures to protect international investments. This was also valid in the case of Argentina among many other Latin American countries in the 1990s (33).

Since the first BIT, concluded in 1959 by Germany and Pakistan (34), the number of BITs grew to more than 2,000 today. Most of these treaties were concluded in the 1990s (35). This extraordinary growth, led to what is known today as an implicit global network of substantive and procedure rules related to international investment.

In clear contrast with the almost simultaneous developments in the field of international trade, the rules and dispute resolution mechanisms applied to international investment are still not part of an institutionalized multilateral system (36). On the contrary, it is possible for one to observe a large degree of fragmentation and even anarchy in the rules and dispute resolution mechanisms applied today to international investments as a result of the proliferation of BITs (37).

More recently, substantive and procedure rules related to international investments are also included in the new generation of free trade or regional agreements (38). Moreover, there is at least one case of this kind of rules being included in an internal trade agreement concluded by the provinces of a federal State (39). This recent trend implies a clear recognition of the strong interaction that exists in the modern international economy between trade in goods and services and investment, especially, of foreign direct investment. The recent experience with the application of the investment rules and the dispute resolution provisions in FTAs and other regional agreements has contributed to the development of a debate about how to protect more efficiently foreign investors and how to open further their access to international arbitration mechanisms. This debate has been recently stimulated by the cases brought under Chapter 11 of NAFTA (40).

Most BITs have common elements both in regard to substantive and procedure rules. But they have also many differences (41). The same is valid for the FTAs or other regional agreements (42).

However, this is normal: even if all of these instruments have been influenced by common explicit or implicit "models," each BIT has been adapted to the concrete interests and circumstances of the signing countries. The "models" are neither mandatory nor static. They are frequently adopted - and even changed - by developed countries as a way to orient their own process of negotiations with countries interested in signing BITs with them (43).

It is possible to observe that the principle of "freedom of organization" (44) is also applied on this field of economic international cooperation. For example, not all of them include provisions related with foreign investor-State dispute resolution (45).

It seems important to recall that when ICSID was created, the predominant idea was that the access to its dispute resolution mechanism would have an exceptional character. This is explicitly recognized in the Preamble of the Washington Convention. Paragraph two of the Preamble states: "Bearing in mind the possibility that from time to time disputes may arise in connection with such investment between Contracting States and national of other Contracting States." Paragraph three then adds: "Recognizing that while such disputes would usually be subject to national legal processes, international methods of settlement may be appropriate in certain cases". (46) (emphases added)

It could be assumed that the ICSID dispute settlement mechanisms were elaborated with the exceptional character of their utilization by interested parties in mind. An argument could be made that they were conceived as "last resort" mechanisms to be used in very few cases.

At the same time, the ICSID system was, from its origin, highly dependent on the substantive and procedure rules elaborated by the interested parties in their own international agreements. The idea was only to offer a procedural framework for the settlement of disputes (47).

This fact explains the present situation, in which the ICSID system appears to be importing deficiencies of substantive and procedural rules included in the global network of BITs and now even in other regional agreements.

One dimension of the impact that those rules of BITs and other regional agreements have on the ICSID system, is reflected in the fact that not always those agreements contain sufficient elements to stimulate investors and host State to exhaust local remedies or to take full advantage of the "cooling-off" period to negotiate a rational solution between themselves. On the contrary, in some cases the submission of requests for ICSID arbitration could be used by some foreign investors as an instrument of leverage in their negotiations with a host country. The practical effect is that instead of having a stimulus to negotiate with the host Government prior to bringing the case for arbitration or, particularly to try to exhaust local jurisdictional options, the foreign investor might find a clear stimulus to use the international arbitration options - at ICSID or at other forums - as a way to open ex-post negotiations.

In such cases the ICSID option - among others - could be perceived not as a framework for a solution of a concrete problem, but as a bargaining instrument. This could be illustrated by the "Argentinean case." Perhaps here, the obligation to negotiate and consult before initiating other means of disputes resolution has not deserved all the attention that seems convenient.

Preserving the efficacy of any dispute resolution mechanism would require - in our opinion - that the parties to the proceeding shall, and not only should, as prescribed in most of the BITs, negotiate in good faith, that is to say, carrying out a good real effort
to amicably solve their dispute before resorting to an adjudication option.

Most probably, the terms used by some BITs are not always sufficiently clear in that respect, making it therefore arguable that the obligation to negotiate in good faith should not necessarily be construed as a legal and enforceable obligation. Even at the ICSID level, it is possible for one to observe that the conciliation mechanism has been rarely used. Clearly it was not used in the "Argentinean case."

The consequence is that what was conceived as an exceptional remedy - a recourse of last resort - could be transformed in certain situations into the normal or prevalent remedy. The result of this could be the overloading of a system that has not been prepared - neither from an institutional nor, especially, from political point of view - to play that role. This could be precisely the situation represented by the "Argentinean case."

At least two serious consequences could derive from this reversal of the role of ICSID.

The first one would be a challenge to the efficacy of the dispute resolution forum. As a result of the increase in the number of simultaneous cases, the overloading of the system could imply a major delay in their resolution and, ultimately, higher costs for the parties. In addition, the large number of cases for substantial compensations against the same country brought in a short period of time could clearly raise doubts about the possibility for the foreign investors of obtaining actual payment for the compensations sought.

This would be then more of an economic and political problem, than a legal one. Therefore, the solution should be searched at an international public policy level.

The second major consequence would be a challenge to the legitimacy of the dispute resolution system and, particularly, to the very idea of direct investor-State arbitration.

Such legitimacy challenge could be open in the affected country and could ultimately lead to an increased pressures in answering, at the national jurisdiction, the constitutionality of the international jurisdictions provided for in BITs (48). This explains the resistance of some developing countries to accept the idea of investor-State arbitration. For example, the Brazilian Congress has until now refused to approve the BITs signed by the Government in the 1990s.

The two challenges described above seems to emerge not only as a result of the "Argentinean case" at ICSID, but also of the debate originated by the NAFTA Chapter 11 cases, particularly in the United States and in Canada (49). Both challenges have been reflected in recent reports, in which other issues have also been raised, such as those related to the selection and the genuine independence of arbitrators, the transparency of the arbitration proceedings, and the possibility for an appeal of arbitral awards before an organ integrated by permanent members (50).

One possible effect of these two challenges could be the return of the political mood prevailing in many countries before the 1990s' against certain characteristics of the BITs and, in particular, against the notion of direct foreign investor-State arbitration. The fact that the recent FTA between Australia and United States did not include a provision on investor-State dispute settlement could be a clear indication of this emerging trend (51).

Conclusions: some issues that could require a further debate

The main question raised in this article is whether what we could already call the "Argentinean case" represents a challenge to the efficacy and, ultimately, the legitimacy of the current and future role of ICSID as a specialized international institution for the settlement of disputes between foreign investors and a host State, especially when legal rights originated in an investment contract or a BIT have been involved.

Moreover, the "Argentinean case" seems to also require some further reflections on the efficacy and legitimacy of what has been called the "global network" of BITs or, at least, of the way these treaties have been conceived in the more recent years. It seems that most of the observed problems could be explained with the characteristics of some of these agreements, at least in the case of Argentina.

Even if it is assumed that all the cases against Argentina involve legitimate claims of investors affected by the economic measures adopted after the collapse of the "currency board" system - a point with several legal implications that we are not analyzing in this article and that should be considered on each concrete case - the fact that a significant number of cases have been brought against a single country in a short period of time may raise concerns about the operation of the dispute settlement system itself.

On the one hand, the accumulation of cases could present a threat of overloading the ICSID system, affecting its capacity to be an efficient forum for solving disputes initiated by foreign investors against sovereign States.

On the other hand, in our opinion, the accumulation of cases could be precisely the fact that raises strong concerns about the future of the ICSID system. In some way this development could be perceived not only as a legal problem but an institutional one as well. Ultimately, it could be even considered a political problem.

The main reason for these concerns is that the ICSID system, as such, could be placed at the center of a public debate related to the way it operates today and, particularly, the way it relates to the global network of BITs.

Some of the major questions that could be further discussed as a result of the "Argentinean case," could be formulated in the following way:

  • Was the original idea of the ICSID Convention to develop an institutional framework for "exceptional cases" - a kind of "last resort" institution - or, on the contrary, it was conceived to be the "normal" way of solving legal claims originated in investors-State investment relations;

  • Is the ICSID system, as it has been conceived, well prepared to handle such a number of simultaneous cases against the same country with its actual structure and rules;

  • Is the "Argentinean case" a reflex of an ICSID problem or it is the result of some failures in the BIT global network or, eventually, on the characteristics of the network of BITs concluded by Argentina with a large number of countries;

And if this would be the case,

  • What kind of concrete ideas could be discussed to contribute to the strengthening of a rule-oriented international investment protection system in which the ICSID system could keep its central role.

By raising those questions, our idea is to try to stimulate what appears to be a necessary technical debate about how to improve the ICSID role and the global network of BITs, with the idea of strengthening the arbitration and the investment protection systems.

This idea seems to represent a major concern of international public interest that goes well beyond the business interests involved in each of the concrete cases against Argentina or, ultimately, against any other country. For this reason, in our opinion, it is a concern that should be discussed independently of the final results of the several cases registered at ICSID by foreign investors against Argentina. That means that the concerns should be addressed and analyzed without pre-judging the merits of the concrete demands and of the factual and legal considerations that could be involved in each of the cases.

At least at two levels, some preliminary ideas could be explored for strengthening the efficacy and legitimacy of the international investment dispute resolution mechanisms - at least those of ICSID - as a result of, among other, the "Argentinean case." These ideas do not include the hypothesis of reviewing the main legal instruments of the ICSID system. It could ultimately require some action at the level of the Administrative Council (Article 6(1)(b) and (c), and Article 6(3) of the ICSID Convention.

Some of these preliminary ideas could include:

  • At the ICSID level:

    • To introduce measures that could stimulate the utilization of the conciliation mechanisms;

    • To require a clear and written information from both the investors and the host State, with respect to the development of the "cooling off" period, including detailed information about the consultation and negotiations developed before raising the concrete demand and about their results (the recent development concerning the "notice of intent" of NAFTA Article 1113 could serve, eventually, as a model);

    • To strengthen the capacity of the ICSID Secretary-General to undertake informal consultations with both parts, before the request is formally accepted;

    • To assure a greater transparency about the terms of the concrete demands, and

    • To identify methods that could dissuade foreign investors of using the ICSID system mainly as an instrument to negotiate with the Government of the host State (for example, through their relative participation on the costs of a proceeding in the case of discontinuance at the request of the claimant -Articles 59 and 61(2) of the ICSID Convention and Rule 44 of the Arbitration Rules).

  • At the BITs level:

    • To strengthen the efficacy of the "cooling off" period, with the idea of stimulating the development of effective consultations and negotiations before opening the arbitration option. It eventually could include a mandatory "filter" through, for example, the intervention of a "screener" as it is prescribed in Article 1713 of the Internal Trade Agreement of Canada;

    • To introduce an explicit narrow interpretation of the most-favored- nation clause with respect to procedure rules and particularly, to the length and modalities of the "cooling off" period; and

    • To require a greater transparency on all the proceedings prior to acceding to the international dispute resolution remedy.

All these and other possible ideas should be discussed keeping in mind the original founding concept of the ICSID system as a last resort institutional framework for dispute resolution among foreign investors and host States.

(1) See, e.g., JACKSON John H., "The Jurisprudence of GATT and the WTO: Insights on Treaty Law and Economic Relations," Cambridge University Press, Cambridge 2000.

(2) Id. at 6-10.

(3) See the texts on

(4) List of pending cases at July 10th 2004.

(5) See, e.g., FRESHFIELD BRUCKHAUS DERINGER, "The Argentine crisis - foreign investor's rights," January 2002. In its executive summary the report says: "The economic collapse of Argentina has been long expected, and its catastrophic arrival has dominated the financial press."

(6) For a description of the main measures, particularly the January 6, 2002, Economic Emergency Law (Law No. 25.561) and its impact on foreign investment, see the report quoted at note 5.

(7) See the details in the "list of pending cases" mentioned in note 4.

(8) For legal arguments of the claimants see, among others, the report mentioned at note 5. For an interesting analysis related to the "Argentinean case," see DÍEZ-HOCHLEITNER, "La eficacia de los tratados de protección de inversiones extranjeras," Real Instituto Elcano, Madrid.

(9) For legal arguments of the Government of Argentina, see the paper mentioned in the following note. See also HERZ Mariana, "El CIADI, los tratados bilaterales de promoción y protección de inversiones y las demandas contra el Estado argentino. Propuestas para enfrentar la situación," in El Derecho, nº 10.978, BsAs, Viernes 2 de abril de 2004, ps. 1 to 5, with a very complete bibliography in Spanish. See also ROSATTI Horacio, "Los tratados bilaterales de inversión, el arbitraje internacional obligatorio y el sistema constitucional argentino," in La Ley, BsAs. 15 de octubre de 2003, ps. 1 to 6.

(10) For a complete list of the bilateral investment treaties concluded by Argentina with other countries, see BOUZAS Roberto and Daniel Chudnovsky, "Foreign Direct Investment and Sustainable Development: the recent Argentine experience," first draft, March 2004, table 7.

(11) According to the list presented in the paper mentioned at note 10, of the 51 agreements concluded by Argentina, 29 were signed with non-OECD countries. Fifteen agreements were concluded with Western Hemisphere countries, 13 with member countries of the European Union; 18 with Eastern European and Asian countries, and 5 with African countries.

(12) For an analysis of the foreign investment policy of Argentina, both from an economic and legal point of view see the paper quoted at note 10 (Bouzas-Chudnovsky paper). For a legal analysis of foreign investment protection agreements concluded by Argentina, see IMAZ VIDELA E. "Protección de Inversiones Extranjeras. Tratados Bilaterales," BsAs, La Ley, 1999.

(13) As it is mentioned in the Bouzas-Chudnovsky paper, all BITs signed by Argentina included a chapter with definitions, scope, conditions of admission, promotion and protection of investment, most favored nation and national treatment principles, conditions for expropriations and transfers, dispute resolution and length of the agreement. For the main foreign investor protections included in the Argentina BITs, See the report mentioned at note 5 and the bibliography included in note 9.

(14) For a comparison of the clauses included in the BITs sign with countries of origin of leading foreign investors in Argentina (Canada, Chile, France, Germany, Italy, Mexico, Spain, Great Britain and the USA) See table 3-A at the Annex of the Bouzas-Chudnovsky paper. With Brazil -another country of origin of foreign investment in Argentina- Argentina signed in January 2004 the Colonia Protocol -Protocol on the Reciprocal Promotion and Protection of Investments-. This Protocol is a Mercosur legal instrument that also includes the other two member countries, Paraguay and Uruguay. It has not been yet ratified. Also in 1994, Mercosur countries signed the Buenos Aires Protocol on the Promotion of Investments from Non-Member countries, with common principles for extra-zone investments. It has not been yet ratified. For a summary of both Mercosur Protocols see the Bouzas-Chudnovsky paper. For the role of the most favored nation clause in BITs concluded by Argentina, see "Cláusula de nación más favorecida y derecho a la libre transferencia de pagos en el marco de los tratados de promoción y protección de inversiones," BERETTA, KAHALE, GODOY, BsAs (

(15) For a comparison of the dispute resolution provisions see the Bouzas-Chudnovsky paper.

(16) For a description of the "cooling off" phase in the Argentina BITs network, see the Bouza-Chudnovsky paper.

(17) For a recent analysis of some of the main cases against Argentina, see the research note by PETERSON Luke Eric, "Emerging bilateral treaty arbitration and sustainable development," International Institute for Sustainable Development (IISD), August 2003 (

(18) For ICSID Convention and other legal instruments, including the Additional Facility, see: and

(19) For a list of bilateral investment treaties see

(20) For recent reports containing a very complete analysis of BITs and foreign investor-State dispute settlement experiences and issues, see United Nations Conference on Trade and Development, "Dispute Settlement: Investor-State," UNCTAD Series on Issues in International Investment Agreements, UNCTAD/ITE/IIT/30, May 2003 (; COSBEY Aaron, MANN Howard; PETERSON Luke Eric; VON MOLTKE Konrad, "Investment and Sustainable Development: a guide to the use and potential of international investment agreements," International Institute for Sustainable Development (IISD), 2004 (; and Organization for Economic Co-operation and Development, "Relationship between International Investment Agreements," May 2004 ( The three reports have exhaustive and up-to-date bibliography.

(21) The Washington Convention , which created ICSID, entered into force in October 1966.

(22) For the evolution of BITs, see, e.g., SACERDOTI Giorgio, "Bilateral Treaties and Multilateral Instruments on Investment Protection," in Recueil des Cours de l'Académie de Droit International de La Haye, 1997, ps. 251-460, and SALACUSE Jeswald W., "BIT by BIT: The Growth of Bilateral Investment Treaties and their Impact on Foreign Investment in Developing Countries," The International Lawyer," vol. 4, n.3, Fall 1990, ps. 655-675;

(23) See, e.g., the articles quoted at note 22.

(24) See op.cit. at notes 20 and 22.

(25) See ibidem.

(26) See ibidem.

(27) See among others the Bouzas-Chudnovsky paper quoted at note 10.

(28) See the SALACUSE article quoted at note 22. For an excellent history of trade treaties, see NOLDE B. "Droit et Technique des Traités de Commerce," in Recueil des Cours de l'Académie de Droit International," La Haye, 1924.

(29) See the SACERDOTI article quoted at note 22. See also, SORNARAJAH M., "The Clash of Globalizations and the International Law on Foreign Investment," The Simon Reisman Lecture in International Trade, The Norman Paterson School of International Affairs, 12 September 2002, Centre for Trade Policy and Law, Ottawa.

(30) See the publications quoted in notes 20, 22 and 28.

(31) See op.cit. in notes 20 and 2.

(32) See ibidem.

(33) See TAWIL Guido Santiago, "Investor-State Arbitration: a Hot Issue in Latin America," M & M. Bomchil, Buenos Aires, September 2002,

(34) See the SACERDOTI article quoted at note 22.

(35) See the publications quoted at note 20.

(36) For a recent analysis of the dispute resolution mechanism in international trade and investment, see PETERSMAN Ernst-Ulrich, "Proliferation and Fragmentation of Dispute Settlement in International Trade: WTO Dispute Settlement Procedures and Alternative Dispute Resolution Mechanisms," paper presented at the Montevideo Conference on Dispute Settlement Mechanisms, Montevideo, April 2004.

(37) See the IISD and the UNCTAD publications quoted at note 20.

(38) See the Petersman paper quoted at note 36.

(39) See the Internal Trade Agreement of Canada, 1994.

(40) See among others, International Institute for Sustainable Development (IISD) (2001), "Private Rights, Public Problems."

(41) See the Sacerdoti article quoted at note 22.

(42) See the Petersman paper quoted at note 36.

(43) For recent changes in BITs models by Canada and the United States, see INVEST-SD: "International Law Weekly News Bulletin," February 23, 2004 and May 24, 2004 (

(44) See SERENI, Angelo Piero, "Le Organizacioni Internazionali," Giuffrè, Milano, 1959.

(45) The most recent example is the Australia-United States Free Trade Agreement. The text is available at

(46) For the preparatory works those two paragraph of the Washington Convention, See ICSID, "History of the ICSID Convention," Volume I, ICSID, Washington.

(47) See SCHREUER Christoph H., "The ICSID Convention: A Commentary," Cambridge University Press.

(48) About the legitimacy challenge, see the publications of IISD and UNCTAD quoted at note 20. See also BROWER Charles, "A Crisis of Legitimacy: as use of international arbitration grows, a lack of accepted appellate mechanisms makes it less reliable," National Law Journal, October 7, 2002. See also the recent ruling of the Supreme Court of Argentina in "José Cartellone Construcciones Civiles S.A. c/ Hidroeléctrica Norpatagónica S.A. o Hidronor S.A. s/proceso de conocimiento" - CSJN - 01/06/2004.

(49) See the IISD and UNCTAD publications.

(50) See the IISD and UNCTAD reports quoted at note 20.

(51) See PACQUING Rafael, "Investor-State arbitration: Canada's experience in NAFTA and the case for its inclusion in the Australia-US FTA", The Australian APEC Study Centre, October 2003.

Félix Peña es Director del Instituto de Comercio Internacional de la Fundación ICBC; Director de la Maestría en Relaciones Comerciales Internacionales de la Universidad Nacional de Tres de Febrero (UNTREF); Miembro del Comité Ejecutivo del Consejo Argentino para las Relaciones Internacionales (CARI). Miembro del Brains Trust del Evian Group. Ampliar trayectoria. |

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