On August 4, 2011, an arbitral tribunal at the International Centre for
Settlement of Investment Disputes (“the ICSID”) set new precedent for the
arbitration world. In Abaclat (and others) v. The Argentine Republic, the Tribunal
held that it had jurisdiction to hear claims brought by some 60,000
Italian nationals against the Republic of Argentina following Argentina’s
default and later partial restructuring of its sovereign debt. This decision is
unprecedented in at least two respects. It is the first decision to hold that an
arbitral tribunal has the legal authority to hear claims that a sovereign’s
default and debt restructuring may have breached a bilateral investment
treaty (“BIT”). Second, Abaclat is the first arbitral decision to hold that
60,000 Claimants may join in one mass claims arbitration under the institutional
rules of the ICSID. If the Abaclat decision is followed in the future, it
will likely have significant impact on sovereign debt restructuring, the
drafting of arbitration clauses, and the scope of ICSID jurisdiction over mass
claims arbitrations.
This commentary begins with a brief sketch of the circumstances leading
to the Abaclat arbitration and then discusses the claims at issue in the most
recent stage of the arbitration, the jurisdictional phase. The third section
discusses the Abaclat tribunal’s (“The Tribunal”) rulings on the jurisdictional
issues. Finally, the fourth section discusses the potential impact of the
case.
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