Thursday, November 17, 2005

Back to the old ways?

Argentina's jurists played a prominent role in the late 19th century and early 20th century, reducing extra-territorial claims by arguing that foreign nationals shouldn't operate under separate rights to nationals. This was enshrined in the Calvo Doctrine which stated that foreign states could not use force to seek redress for any outstanding debts to them. But Gus van Harten in the LSE's law department argued that this position was being eroded through the recent investment arbitration rulings against Argentina following the 2001-02 economic collapse.

Van Harten's argument in the Latin American research seminar (my regular Tuesday fix at the School) was that the increase in signed bilateral investment treaties between industrialised and industrialising countries since the 1990s has set the scene for something similar to what existed at the beginning of the last century. With investors losing out as a result of the Argentine economic crisis, many have taken to pursuing them claims through the courts using the treaties as their main instrument.

The result has been substantial dmagaes awarded against the Argentines with van Harten citing CMS Gas as an example. What is notable about these decisions are the structure of the arbitration models, adopting a commercial approach rather than a public one and the apparent absence of any desire by either Argentina or other treaty signatories either to renegotiate the nature and terms of these treaties or avoid signing them at all.

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