Decision on Jurisdiction and Admissibility

284 Pages·2011·1.67 MB·English

ICSID CASE NO. ARB/07/5

INTERNATIONAL CENTRE FOR SETTLEMENT
OF INVESTMENT DISPUTES
WASHINGTON, D.C.

ABACLAT AND OTHERS
(Case formerly known as GIOVANNA A BECCARA AND OTHERS*)
(CLAIMANTS)

and
THE ARGENTINE REPUBLIC
(RESPONDENT)

__________________________________

DECISION ON JURISDICTION AND ADMISSIBILITY
__________________________________

ARBITRAL TRIBUNAL
Professor Pierre Tercier, President
Professor Georges Abi-Saab, Arbitrator
Professor Albert Jan van den Berg, Arbitrator

Secretary to the Tribunal:
Mr. Gonzalo Flores

Date of dispatch to the Parties: 4 August 2011
ICSID CASE NO. ARB/07/5

Representing Giovanna a Beccara and Representing The Argentine Republic
others Dra. Angélina María Esther Abbona
Ms. Carolyn B. Lamm Procuradora del Tesoro de la Nación Argentina
Mr. Jonathan C. Hamilton Procuración del Tesoro de la Nación Argentina
Ms. Abby Cohen Smutny Posadas 1641
Ms. Andrea J. Menaker Buenos Aires (C.P. 1112)
Mr. Francis A. Vasquez, Jr. Argentina
WHITE & CASE LLP
701 Thirteen Street, N.W. and
Washington, D.C. 20005
U.S.A. Mr. Jonathan I. Blackman
Mr. Matthew D. Slater
and Mr. Carmine D. Boccuzzi
Ms. Inna Rozenberg
Avv. Vittorio Grimaldi Mr. Ezequiel Sánchez Herrera
Avv. Paolo Marzano CLEARY GOTTLIEB STEEN & HAMILTON LLP
GRIMALDI E ASSOCIATI One Liberty Plaza
Via Pinciana, 25 New York, NY 10006
00198 Rome U.S.A.
Italy

and

Dr. José Martínez de Hoz, Jr.
Dra. Valeria Macchia
PEREZ ALATI, GRONDONA, BENITZ, ARNTSEN
& MARTINES DE HOZ (JR.)
Suipacha 1111 – Piso 18
C1008AAW Buenos Aires
Argentina

* For the change of name, see § 641 below.
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Table of Contents

I. PARTIES ........................................................................................................................................ 10
A. CLAIMANTS .......................................................................................................................... 10
B. RESPONDENT ........................................................................................................................ 11
II. FACTS ............................................................................................................................................ 12
A. INTRODUCTION ..................................................................................................................... 12
(1) General Concepts relating to Financial Market and Bonds ...................................... 12
(2) General Overview on Sovereign Debt Restructuring ............................................... 17
(3) Argentina‘s Restructuring of Its Economy and Its Debt in relation to Bonds .......... 22
(a) Argentina‘s Restructuring of Its Economy in the 1990s ................................ 22
(b) Argentina‘s Financial Crisis and Default of 2001 ......................................... 26
(c) The Events following Argentina‘s Default of 2001 ....................................... 28
(d) Argentina‘s Restructuring of Its Debt in relation to Bonds and Relevant
Creditors‘ Reactions ...................................................................................... 28
(4) Evolution of the Dispute following Argentina‘s Exchange Offer 2005 .................... 39
(5) New Exchange Offer 2010 ....................................................................................... 50
B. PROCEDURAL HISTORY ......................................................................................................... 51
(1) Request for Arbitration and its Registration by ICSID ............................................. 51
(2) Constitution of the Arbitral Tribunal ........................................................................ 53
(3) Arbitral Procedure .................................................................................................... 55
III. LAW................................................................................................................................................ 77
A. INTRODUCTORY REMARKS ................................................................................................... 77
(1) The Arbitral Procedure ............................................................................................. 77
(2) Object of the Present Decision .................................................................................. 78
(3) Summary of the Parties‘ Positions and Relief Sought .............................................. 79
(a) Respondent‘s Position and Requests for Relief ............................................. 80
(b) Claimants‘ Position and Requests for Relief ................................................. 84
(4) Structure of the Present Decision .............................................................................. 87
B. LEGAL BASIS FOR THE TRIBUNAL‘S JURISDICTION ............................................................... 90
(1) Article 25 ICSID Convention ................................................................................... 91
(2) Argentina-Italy BIT .................................................................................................. 93
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(a) General Scope and Aim of the Argentina-Italy BIT ...................................... 94
(b) Article 8 BIT ................................................................................................. 96
(3) Relationship between Article 25 ICSID Convention and Article 8 BIT ................. 102
(a) In General .................................................................................................... 102
(b) With regard to the Subject Matter of the Dispute ........................................ 102
(c) With regard to the Parties ............................................................................ 104
(d) With regard to the Procedure to Be Followed ............................................. 106
(4) Other Relevant Legal Provisions and Principles ..................................................... 107
(5) ICSID, BIT and Mass Claims ................................................................................. 107
C. THE ARBITRAL TRIBUNAL‘S JURISDICTION ........................................................................ 109
(1) Introductory Remarks ............................................................................................. 109
(2) Legal Dispute Arising out of the BIT – Issues 7 & 6.............................................. 109
(a) Issues at Stake and Relevant Legal Provisions ............................................ 109
(b) Parties‘ Positions ......................................................................................... 112
(c) Tribunal‘s Findings ..................................................................................... 115
(i) Alleged Breaches of the BIT ......................................................................... 115
(ii) Contract Claims v. Treaty Claims ................................................................ 118
(iii) Potential Contract Claims against the Italian Banks .................................... 121
(d) Conclusion ................................................................................................... 122
(3) Legal Dispute relating to an Investment – Issues 9 & 8 ......................................... 123
(a) Issues and Relevant Legal Provisions.......................................................... 123
(b) Parties‘ Positions ......................................................................................... 128
(c) Tribunal‘s Findings ..................................................................................... 133
(i) Definition and Role of an Investment – In General....................................... 133
(ii) Investment under Article 1(1) BIT ................................................................ 137
(iii) Investment under Article 25 ICSID Convention ............................................ 141
(iv) Two Alternative Views on “Investment” Lead to the Same Result ................ 142
(v) Made in Argentina ........................................................................................ 144
(vi) In Compliance with the Law ......................................................................... 147
(d) Conclusion ................................................................................................... 149
(4) Between Argentina and Italian Investors - Issues 10 & 11 ..................................... 150
(a) Issues and Relevant Legal Provisions.......................................................... 150
(b) Parties‘ Positions ......................................................................................... 156
(c) Tribunal‘s Findings ..................................................................................... 158
(i) Jurisdiction Rationae Personae – In General ............................................... 158
(ii) With regard to Natural Persons .................................................................... 159
(iii) With regard to Juridical Persons .................................................................. 161
(d) Conclusion ................................................................................................... 165
(5) Subject to the Claimants‘ Written Consent – Issue 2 .............................................. 166
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(a) Issues and Relevant Legal Provisions.......................................................... 166
(b) Parties‘ Positions ......................................................................................... 167
(c) Tribunal‘s Findings ..................................................................................... 170
(i) Law Applicable to the Question of Consent .................................................. 170
(ii) Scope of Examination of the Tribunal ........................................................... 170
(iii) Relevant Substantive Validity Requirements ................................................. 171
(iv) Argentina’s Standing to Challenge Claimants’ Consent............................... 173
(v) Existence and Validity of Claimants’ Consent .............................................. 174
(vi) Existence of a Clear Consent to ICSID Arbitration ...................................... 177
(vii) Validity of Claimants’ Consent to ICSID Arbitration ................................... 178
(d) Conclusion ................................................................................................... 183
(6) Subject to Argentina‘s Written Consent – Issues 1(a), 4 & 8 ................................. 183
(a) Issues and Relevant Legal Provisions.......................................................... 183
(b) Parties‘ Positions ......................................................................................... 185
(c) Tribunal‘s Findings ..................................................................................... 187
(i) In General ..................................................................................................... 187
(ii) Regarding Foreign Debt Restructuring ........................................................ 187
(iii) Regarding “Mass Claims” ........................................................................... 188
(iv) Regarding the Negotiation and 18 Months Litigation Requirement ............. 193
(v) Regarding the Forum Selection Clauses ....................................................... 194
(d) Conclusion ................................................................................................... 195
(7) Conclusion on Jurisdiction ..................................................................................... 195
D. ADMISSIBILITY OF THE CLAIM ............................................................................................ 201
(1) Introductory Remarks ............................................................................................. 201
(2) Mass Action – Issue 1(b) ........................................................................................ 201
(a) Issues and Relevant Legal Provisions.......................................................... 201
(b) Parties‘ Positions ......................................................................................... 203
(c) Tribunal‘s Findings ..................................................................................... 205
(i) Interpretation of the Silence of the ICSID Framework ................................. 206
(ii) Powers of the Arbitral Tribunal under Article 44 ICSID Convention and
Rule 19 ICSID Arbitration Rules .................................................................. 207
(iii) Nature of the Necessary Adaptations to the ICSID Standard Procedure ...... 210
(iv) Admissibility of the Necessary Adaptations .................................................. 211
(v) Policy Considerations ................................................................................... 215
(d) Conclusion ................................................................................................... 216
(3) Consultation Requirement – Issue 4 ....................................................................... 217
(a) Issues and Relevant Legal Provision ........................................................... 217
(b) Parties‘ Positions ......................................................................................... 218
(c) Tribunal‘s Findings ..................................................................................... 219
(i) Existence of Consultations ............................................................................ 219
(ii) TFA’s Role in the Consultations ................................................................... 220
(iii) Consultations Requirement as Expression of Good Will .............................. 221
(d) Conclusion ................................................................................................... 222
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(4) 18 Months Litigation Requirement – Issues 4 & 5 ................................................. 222
(a) Issues and Relevant Legal Provisions.......................................................... 222
(b) Parties‘ Positions ......................................................................................... 224
(c) Tribunal‘s Findings ..................................................................................... 226
(i) The System Put in Place by Article 8 BIT ..................................................... 226
(ii) General Consequences of a Disregard of the System ................................... 227
(iii) Consequences of Claimants’ Disregard of the 18 Months Litigation
Requirement .................................................................................................. 229
(d) Conclusion ................................................................................................... 231
(5) Withdrawal and Addition of Claimants - Issues 3(a) and 3(b) ............................... 232
(a) Relevant Facts ............................................................................................. 232
(b) Issues and Relevant Legal Provisions.......................................................... 234
(c) Parties‘ Positions ......................................................................................... 238
(d) Tribunal‘s Findings ..................................................................................... 240
(i) Addition of Claimants ................................................................................... 240
(ii) Withdrawal of Claimants .............................................................................. 243
(a) Withdrawal, Discontinuance and Default ......................................... 243
(b) Conditions for Discontinuance ......................................................... 245
(c) Terms of Discontinuance.................................................................. 247
(d) Consequences of the Discontinuance ............................................... 249
(e) Conclusion ................................................................................................... 250
(6) Abuse of Rights – Issue 2(b)................................................................................... 252
(a) Issues ........................................................................................................... 252
(b) Parties‘ Positions ......................................................................................... 252
(c) Tribunal‘s Findings ..................................................................................... 253
(i) Good Faith in the Context of Treaty Claims ................................................. 253
(ii) Qualification of the Alleged Abuse of Rights ................................................ 255
(iii) Lack of Relevant Abuse of Rights .................................................................. 256
(d) Conclusion ................................................................................................... 258
(7) Conclusion on Admissibility .................................................................................. 258
E. OTHER PROCEDURAL ISSUES .............................................................................................. 263
(1) In General: Managing the Procedure ...................................................................... 263
(a) Introduction ................................................................................................. 263
(b) Splitting of the Merits Phase ....................................................................... 264
(c) Conclusion ................................................................................................... 265
(2) Specific Procedural Aspects ................................................................................... 265
(a) Admissibility of Substitute Annexes – Issue 3(a) ........................................ 265
(b) Other Procedural Aspects ............................................................................ 268
IV. COSTS .......................................................................................................................................... 269
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V. THE 11 ISSUES SERIATIM - ANSWERS AND REFERENCES .............................................. 273
VI. DECISIONS .................................................................................................................................. 279

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Abbreviations

In this Decision, the Tribunal adopts the following abbreviations:
- ―RfA‖ refers to Claimants‘ Request for Arbitration of 14 September 2006.
- ―R-MJ‖ refers to Respondent‘s First Memorial on Jurisdiction and
Admissibility filed on 8 August 2008.
- ―C-MJ‖ refers to Claimants‘ Counter-Memorial on Jurisdiction filed on 7
November 2008.
- ―R-R-MJ‖ refers to Respondent‘s Reply Memorial on Jurisdiction and
Admissibility filed on 23 February 2009.
- ―C-R-MJ‖ refers to Claimants‘ Rejoinder Memorial on Jurisdiction filed on 6
May 2009.
- ―First Session Tr.‖ refers to the transcript made of the First Session of 10
April 2008 (Tr. p. 1/1 means Transcript on page 1 on line 1).
- ―First Session Minutes‖ refers to the Minutes of the First Session of 10 April
2008.
- ―Exh. C[letter]-[N°]‖ refers to Claimants‘ exhibits.
- ―Exh. R[letter]-[N°]‖ refers to Respondent‘s exhibits.
- ―Hearing Tr.‖ Refers to the transcript made of the Hearing on Jurisdiction
held from 7 to 13 April 2010 (Hearing Tr. Day 1 p. 1/1 means Transcript of
the Hearing Day 1, page 1 on line 1).
- ―C-PHB‖ refers to Claimants‘ Post-Hearing Brief of 22 June 2010.
- ―R-PHB‖ refers to Respondent‘s Post-Hearing Brief of 22 June 2010.
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With regard to the witness and expert statements,:
- ―BIANCHI I‖ refers to Legal Opinion of Dr. Alberto B. Bianchi of 5
November 2008;
- ―BIANCHI II‖ refers to the Supplementary Legal Opinion of
Dr. Alberto B. Bianchi of 6 May 2009;
- ―BRIGUGLIO‖ refers to the Opinion of Prof. Avv. Antonio Briguglio of 13
February 2009;
- ―CERNIGLIA‖ refers to the Declaration of Avv. Massimo Cerniglia of 4 May
2009;
- ―COTTANI I‖ refers to the Expert Report by Joaquín A. Cottani of 7 November
2008;
- ―CREMIEUX‖ refers to the Expert Report of Pierre-Yves Cremieux (Analysis
Group, Inc.) of 18 February 2009;
- ―HARDIE I‖ refers to the Expert Report of Iain Hardie of 6 November 2008;
- ―ILLUMINATO‖ refers to the Declaration of Dott. Sergio Mario Illuminato of
10 February 2009;
- ―MAIRAL I‖ refers to the Legal Opinion of Héctor A. Mairal of 6 November
2008;
- ―NAGAREDA‖ refers to the Expert Opinion of Richard A. Nagareda of 19
February 2009;
- ―NAVIGANT I‖ refers to the Expert Report of Brent C. Kaczmarek, CFA
(Navigant Consulting, Inc.) of 7 November 2008;
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- ―PICARDI‖ refers to the Independent Legal Opinion of Prof. Nicola Picardi of
24 April 2009;
- ―PINGLE I‖ refers to the Expert Report of Mr. Rex E. Pingle of 7 November
2008;
- ―SLAUGHTER & BURKE-WHITE I‖ refers to the Expert Witness Statement of
Anne-Marie Slaughter and William Burke-White of 8 August 2008;
- ―SUSMEL‖ refers to the Legal Opinion of Francisco G. Susmel of 5 November
2008.
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