Court arbitration ruling against Argentina leaves question on U.S. BITs undecided

In its first-ever case involving investor-state arbitration, the U.S. Supreme Court yesterday ruled against the state. The state at bar was the Republic of Argentina, which had sought to defend the reversal below of a 2007 decision in which a 3-member arbitral panel awarded $185 million in damages. But in its decision in BG Group plc v. Republic of Argentina, the high court overturned the appellate decision.  A seven-member majority accepted the argument of petitioner, a British company that had suffered losses on a Buenos Aires investment as a result of emergency measures Argentina took during an early 2000s economic collapse. The private investor had sought arbitration without first fulfilling a requirement, found in Article 8(2)(a) of the 1990 Britain-Argentina BIT, the insiders’ shorthand for “bilateral investment treaty.” Arbitrators excused that nonfulfillment, and the Court majority deferred to the arbitrators. In so doing, it rejected the de novo review applied by the court below and urged by Argentina.

Iscot‘ve had the honor of following this case for SCOTUSblog, via a pre-argument preview, a post-argument recap, and, just posted, an opinion analysis. After summarizing the opinion for the Court by Justice Stephen G. Breyer, the dissent by Chief Justice John G. Roberts, Jr., and the concurrence in part by Justice Sonia Sotomayor, the analysis views the decision as advancing a clear statement rule,

‘a rule that no less than a private party, a nation-state which wants to assure that courts rather than arbitrators have the last word on whether it consented to arbitration must say so explicitly.’

As for treaties that are explicit on this account, among them a number of BITs to which the United States is a party, the analysis, available in full here, concluded:

‘Whether in some future case the Supreme Court will enforce such express provisions remains an open question.’

At Supreme Court, “intellectual whiplash” over investor-sovereign arbitration

The course of the U.S. Supreme Court oral argument in an international arbitration case is evident in Justice Anthony M. Kennedy’s comment toward the end of Monday’s hearing:

‘Your – your whole argument gives me intellectual whiplash.’

I put that comment into context in my SCOTUSblog post today, which also describes other exchanges between various Justices and the 3 lawyers who argued the matter – for the Republic of Argentina, for a British private investor, and for amicus the United States of America.

The case that’s nowdoll under submission, BG Group PLC v. Republic of Argentina, arises out of a dispute covered by the 1990 bilateral investment treaty between Britain and Argentina. Today’s post on “the matryoshka-doll complexities” of the case builds on my November SCOTUSblog argument preview, on which I posted here. (photo credit)

Arbitration say-so & U.S. courts

scotusblog-banner-925-1143Just published at SCOTUSblog: my preview of a case asking whether arbitrators or U.S. courts enjoy the last word on jurisdiction to arbitrate. The post discusses decisions below and briefs filed in BG Group PLC v. Republic of Argentina, a dispute arising out of the Britain-Argentina bilateral investment treaty, about which Justices are scheduled to hear oral argument on December 2.