MJIEL Vol 9 Issue 1 2012 - Article 4

ABSTRACT: The defence of necessity, especially its application and scope in investment arbitration, has emerged as one of the most contested questions of international investment law. International investment agreements, which constitute the prime source of this branch of law, usually contain a provision to deal with the protection of essential security interests in extra-ordinary situations. However, a major problem with these agreements is the indeterminate language of the textual provisions. This creates a situation in which the customary rules of international law play a prominent role in the interpretation of treaty provisions, igniting the perennial debate of what is the relationship between the defence of necessity under customary international law and a specific international investment agreement. It is in this connection that the paper examines and analyses some of the principal legal issues in which the divergent opinions have been expressed by the investment tribunals dealing with the emergency measures of Argentina. This paper argues that the repeated neglect of earlier decisions will further add to the concerns of legitimacy. The paper concludes that the Vienna Convention on the Law of Treaties can play a significant role in the proper interpretation of ‘necessity’ provisions in international investment law.

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