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International Centre for Settlement of Investment Disputes: Sempra Energy International v. Argentine Republic, Application for Annulment of the Award
Published online by Cambridge University Press: 27 February 2017
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- Copyright © American Society of International Law 2010
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End notes
* This text was reproduced and reformatted from the text available at the International Centre for Settlement of Investment Disputes website (visited October 6, 2010) http://ita.law.uvic.ca/documents/SempraAnnulmentDecision.pdf.
1 Sempra Energy Int’l v. Argentine Republic, ICSID Case No. ARB/02/16, Decision on the Argentine Republic’s Application for Annulment of the Award (June 29, 2010), available at http://icsid.worldbank.org/ICSID/FrontServlet?requestType=CasesRH&actionVal=showDoc&docId=DC1550_En&caseId=C8 [hereinafter Sempra Annulment Decision].
2 Sempra Energy Int’l v. Argentine Republic, ICSID Case No. ARB/02/16, Award (Sept. 28, 2007), available at http://icsid.worldbank.org/ICSID/FrontServlet?requestType=CasesRH&actionVal=showDoc&docId=DC694_En&caseId=C8.
3 In contrast to other arbitral awards, ICSID awards are not subject to challenges before domestic courts of the seat of the arbitration or by the courts charged with the task of enforcing the award. Christoph Schreuer et al., Article 52, The ICSID Convention: A Commentary 900, ¶ 5 (2d ed. 2009).
4 Id. 903, ¶ 14.
5 The grounds for annulment under Article 52(1) ICSID Convention are the following: ‘‘(a) that the Tribunal was not properly constituted; (b) that the Tribunal has manifestly exceeded its powers; (c) that there was corruption on the part of a member of the Tribunal; (d) that there has been a serious departure from a fundamental rule of procedure; or (e) that the award has failed to state the reasons on which it is based.’’ Convention on the Settlement of Investment Disputes Between States and Nationals of Other States, 17 U.S.T. 1270, 575 U.N.T.S. 159, available at http://icsid.worldbank.org/ICSID/StaticFiles/basicdoc/CRR_English-final.pdf.
6 Schreuer, supra note 3, 901, ¶ 10.
7 Id. 901, ¶ 11.
8 See id. 902-3, ¶ 13 (referencing numerous ICSID annulment decisions).
9 Sempra Annulment Decision, supra note 1, ¶ 73.
10 It invoked Article 52(1)(a), (b), (d), and (e). Id. 41-43.
11 Article XI of the BIT between Argentina and the United States reads: ‘‘This Treaty shall not preclude the application by either Party of measures necessary for the maintenance of public order, the fulfilment of its obligations with respect to the maintenance or restoration of international peace or security, or the [p]rotection of its own essential security interests.’’ Sempra Annulment Decision, supra note 1, ¶ 192.
12 Id. ¶ 111.
13 ‘‘Article XI is a primary rule, since it delimits the scope of the substantive obligations of the BIT itself. If the requirements under Article XI are met, there is no breach of the BIT. Article 25 is a secondary rule, since it provides discharge from responsibility of the State for internationally wrongful acts. It is a ‘ground for precluding the wrongfulness of an act not in conformity with an international obligation,’ under certain strict conditions.’ The state of necessity does not extinguish or terminate the obligation, but excludes responsibility for its non-performance.’’ Id. ¶ 115 (footnote omitted).
14 Id. ¶ 135.
15 Id. ¶ 77.
16 Id. ¶ 78.
17 Id. ¶¶ 91-105.
18 Id. ¶¶ 106 et seq.
19 In this respect, the tribunal concluded that the crisis had not ‘‘compromised the very existence of the State and its independence’’ and that ‘‘the Emergency Law was [not] the ‘only’ alternative to address the economic crisis.’’ Id. ¶¶ 140-41.
20 Id. ¶ 142.
21 Id. ¶ 199.
22 Id. ¶ 200.
23 Id. ¶ 208.
24 Id. ¶ 209
25 Id. ¶ 217.
26 CMS Gas Transmission Co. v. Argentine Republic, ICSID Case No. ARB/01/3, Decision of the Ad hoc Committee on the Application for Annulment of the Argentine Republic (Sept. 25, 2007), available at http://icsid.worldbank.org/ICSID/FrontServlet?requestType=CasesRH&actionVal=showDoc&docId=DC687_En&caseId=C4 [hereinafter CMS Annulment Decision].
27 Enron Creditors Recovery Corp. v. Argentine Republic, ICSID Case No. ARB/91/3, Decision on the Application for Annulment of the Argentine Republic (July 30, 2010), available at http://ita.law.uvic.ca/documents/EnronAnnulmentDecision.pdf [hereinafter Enron Annulment Decision].
28 CMS Annulment Decision, supra note 26, ¶¶ 101-36.
29 Id. ¶ 134.
30 Id. ¶ 136.
31 Id. ¶ 135.
32 Id. ¶ 136.
33 Id.
34 Id. ¶ 97.
35 Id. ¶ 100.
36 Enron Annulment Decision, supra note 27.
37 Id. ¶ 393.
38 Sempra Energy Int’l v. Argentine Republic, ICSID Case No. ARB/02/16, Annulment Proceeding, Decision on Sempra Energy International’s Request for the Termination of the Stay of Enforcement of the Award (Rule 54 of the ICSID Arbitration Rules) (Aug. 7, 2009), available at http://icsid.worldbank.org/ICSID/FrontServlet?requestType=CasesRH&actionVal=showDoc&docId=DC1132_En&caseId=C8.
1 Compañía de Aguas del Aconquija S.A. and Vivendi Universal S.A. v. Argentine Republic (ICSID Case No. ARB/97/3), Decision on the Argentine Republic’s Request for a Continued Stay of Enforcement of the Award rendered on 20 August 2007 (4 November 2008).
2 Enron Creditors Recovery Corporation (formerly Enron Corporation) and Ponderosa Assets, L.P. v. Argentine Republic (ICSID Case No. ARB/01/3) – Annulment Proceeding. The law firm of King & Spalding LLP (Houston) represents the claimants in both annulment proceedings.
3 Award, para 286
4 Award, para 303
5 Award, para 312
6 Award, para 330
7 ICSID Arbitration Rule 50(1)(c)(iii) also confirms that these grounds are the sole grounds for annulment.
8 As explained by the ad hoc committee in the Klöckner arbitration, ‘‘... application of the paragraph Article 52(1) of the Convention demands neither a narrow interpretation, nor a broad interpretation, but an appropriate interpretation, taking into account the legitimate concern to surround the exercise of the remedy to the maximum extent possible with guarantees in order to achieve a harmonious balance between the various objectives of the Convention.’’ (Klöckner Industrie-Anlagen GmbH and others v. United Republic of Cameroon and Société Camerounaise des Engrais (ICSID Case No. ARB/81/2), Decision on Annulment, 3 May 1985, p 3).
9 Hussein Nuaman Soufraki v. The United Arab Emirates (ICSID Case No. ARB/02/7), Decision on Annulment of 5 June 2007, para 22, that ‘‘[s]uch presumption [---] finds no basis in the text of Article 52 and has not been used by annulment committees’’.
10 Argentina’s position is dealt with in the Tribunal’s Decision on Jurisdiction, para 25
11 Id, para 26
12 Id, para 27
13 This option evidently was open under Article VII(8) of the BIT.
14 Decision on Jurisdiction, para 91.
15 The matter of investors’ jus standi under, inter alia, the USArgentina BIT has been discussed also in other, previous ICSID cases, see e.g. Enron v. Argentina (ICSID Case No. ARB/01/3), Decision on Jurisdiction (2 August 2004), CMS Gas Transmission Co. v. Argentina (ICSID Case No ARB/ 01/8), Decision on Objections to Jurisdiction (17 July 2003), AES Corp. v. Argentina (ICSID Case No. ARB/02/17), Decision on Jurisdiction (26 April 2005), LG&E Energy Corp. v. Argentina (ICSID Case No. ARB/02/1), Decision on Objections to Jurisdiction (30 April 2004), Lanco International v. Argentina (ICSID Case No. ARB/97/6), Preliminary Decision on Jurisdiction (8 December 1998), Azurix v. Argentina (ICSID No. ARB/01/12), Decision on Jurisdiction, (8 December 2003), Suez v. Argentina (ICSID Case No. ARB/03/17), Decision on Jurisdiction (16 May 2006), Total S.A. v. Argentina (ICSID Case No. ARB/04/01), Decision on Objections to Jurisdiction (25 August 2006), Continental Casualty Company v. Argentina (ICSID Case No. ARB/03/9), Decision on Jurisdiction (22 February 2006), Gas Natural SDG S.A. v. Argentina (ICSID Case No. ARB/03/10, Decision on Jurisdiction (17 June 2005), Camuzzi International S.A. v. Argentina (ICSID Case No. ARB/03/2), Decision on Jurisdiction (11 May 2005), Compañía de Aguas del Aconquija S.A. & Vivendi Universal (formerly Générale des Eaux) v. Argentina (‘‘Vivendi II’’) (ICSID Case No. 97/3), Decision on Jurisdiction (14 November 2005), Siemens v. Argentina (ICSID Case No. ARB/02/8), Decision on Jurisdiction (3 August 2004), El Paso Energy International Company v. Argentina (ICSID Case No. ARB/03/15), Decision on Jurisdiction (27 April 2006).
16 Decision on Jurisdiction, para 101
17 Memorial on Annulment, para 48
18 The quotation is taken from the CMS Annulment Decision, para 71.
19 Award, paras 378 and 388
20 Para 376
21 Quoted from the Continental Casualty Award, para 167; Continental Casualty Company v. Argentina (ICSID Case No. ARB/ 03/9), Award of 5 September 2008.
22 CMS Annulment Decision, para 129
23 Id., para 129
24 Continental Casualty Award, para 166
25 Award, para 388
26 Award, para 388
27 Award, para 388
28 Award, para 375
29 Award, para 348
30 Award, para 348
31 Award, paras 349-350
32 Award, para 351
33 Award, para 353
34 Award, para 353
35 Award, para 375
36 Award, para 378
37 Award, para 388
38 Award, para 431
39 Sempra’s rejoinder on annulment, para 328
40 Award, paras 375, 378
41 Award, para 375
42 Award, para 376
43 Annulment Memorial, para 426
44 Amco Asia Corporation and others v. Republic of Indonesia (ICSID Case No. ARB/81/1) (Amco II), Decision on Annulment of 3 December 1992. Similar statements have been made by other ad hoc committees, e.g. the MTD Annulment Committee, which stated that annulment may be a consequence of the purported application of the relevant law, while in fact applying quite a different law (MTD Equity Sdn Bhd. & MTD Chile S.A. v. Chile (ICSID Case No. ARB/01/7), Annulment Decision of 21 March 2007, para 47).
45 Schreuer, ICSID Commentary (2009), page 997 (para 344).
46 CMS v. Argentina, Decision on Annulment, para 97.
47 Award, para 375
48 Award, para 388
49 Maritime International Nominees Establishment v. Republic of Guinea (ICSID Case No. ARB/84/4); Decision on Annulment of 22 December 1989, para 5.04.
50 Amco Asia Corporation and others v. Republic of Indonesia (ICSID Case No. ARB/71/1), Decision on Annulment of 16 May 1986 (Amco I).
51 Para 132 of the CMS Decision on Annulment.
52 Annulment Memorial, para 426
53 Sempra’s Counter-Memorial, para 373
54 It may be noted that the matter of Article XI was dealt with by Argentina in its Counter-Memorial in the arbitration (AR39), Section XI in paras 647 – 659 (particularly in paragraph 654). In its Rejoinder (AR50), Argentina set out its defence under Article XI and distinguished it from the doctrine of necessity under customary international law (paras 432 – 635, e.g. para 633), affirming its position that invoking the above-mentioned article should not be confused with invocation of the state of necessity by explaining that ‘‘[t]hey do not constitute a defence as the state of necessity but an invocation of the provisions of the applicable BITs’’. This distinction is also addressed by paras 376 – 377 of the Award. From the above considerations it is clear – contrary to Sempra’s allegations – that Argentina distinguished the application of Article XI of the BIT from the plea of necessity under customary international law.
55 See above, paras 173 – 174
56 Schreuer, ICSID Commentary (2009), page 938 (para 135)
57 The following examples of ad hoc committees which have grappled with the concept of the qualifying criterion of ‘‘manifest’’ in the context of a manifest excess of powers may be recalled in this relation.
‘‘The ad hoc Committee considers that the term ‘‘manifest’’ is a strong and emphatic term referring to obviousness. In its dictionary meaning, ‘‘manifest’’ is substantially equivalent to ‘‘clear’’, ‘‘plain’’, ‘‘obvious’’, ‘‘evident’’:
‘‘what is clear can be seen readily;
what is obvious lies directly in our way, and necessarily arrests our attention;
what is evident so clearly as to remove doubt;
what is manifest is very distinctly evident’’ (Soufraki v. UAE, para 39).
‘‘The excess of power must be self-evident rather than the product of elaborate interpretations one way or the other. When the latter happens, the excess of power is no longer manifest.’’ (Wena Hotels Limited v. Arab Republic of Egypt (ICSID Case No. ARB/98/4), Decision on Annulment, 5 February 2002, para 25).
‘‘ . . . even if a Tribunal exceeds its powers, the excess must be plain on its face for annulment to be an available remedy. Any excess apparent in a Tribunal’s conduct, if susceptible of argument ‘one way or the other,’ is not manifest’’ (CDC Group plc v. Republic of Seychelles (ICSID Case No. ARB/ 02/14), Decision on Annulment, 29 June 2005, para 41).
58 Award, para 388