Necessity And "Supplementary Means of Interpretation" For Non-Precluded Measures in Bilateral Investment Treaties

Abstract

This Article scrutinizes varying interpretive methodologies used by different tribunals of the International Centre for Settlement of Investment Disputes ("ICSID") in relation to Article XI of the US-Argentina bilateral investment treaty ("BIT"), which, in different degrees, had referred to the customary doctrine of "necessity" to derive Article XI's substantive meaning and legal effects. Neither Sempra v. Argentina, LG&E v. Argentina, CMS Gas v. Argentina, nor most recently in 2008, Cont'l Cas. Ins. Co. v. Argentina, evince a demonstrably adequate interpretive methodology within the framework of Articles 31 and 32 of the Vienna Convention on the Law of Treaties ("VCLT"). Accordingly, this Article proposes a return to these fundamental rules of treaty interpretation. Given conceptual and methodological incompatibilities between the customary doctrine of "necessity" and Article XI, this Article holds that the customary doctrine has no interpretive utility for Article XI. Rather, treaty appliers of Article XI (and other similarly-worded treaty clauses on nonprecluded measures) should abide by the components of the unitary system of interpretation under the VCLT, particularly the treaty text and context. A State invoking an Article XI-type Non- Precluded Measure ("NPM") utilizes Article XI to address potential international responsibility vis-a-vis the other State Party to the BIT, and cannot use Article XI to remove its lex specialis substantive duties under the BIT to that State Party's investors. Finally, this Article recommends that treaty appliers should privilege a holistic reading of the lex specialis as the governing law whenever the host State claims an economic emergency to plead outright exculpation from substantive obligations in bilateral investment treaties.