Collective Actions in ICSID Arbitration: The Argentine Bonds Case

Abstract

The article deals with the subject matter of collective actions in ICSID arbitration. This topic has emerged as one of the ‘hottest’ issues in international investment law after the release of the Decision on Jurisdiction and Admissibility in the case Abaclat and others vs. Argentina. In this decision the majority of the ICSID Arbitral Tribunal considers as admissible in ICSID arbitration the collective action of about 60,000 Italian bondholders (initially about 180,000) represented by the Association for the Protection of Investors in Argentine Securities (‘Associazione per la Tutela degli Investitori in Titoli Argentini’). The decision issued by the Abaclat Tribunal, leaving the Argentine case aside, could open the way to mass claims in international arbitrations based on international agreements on the protection of foreign investments (the so called BITs), brought by holdout creditors in case of sovereign insolvency. The article critically analyses the majority’s ruling by commenting on some selected issues dealt with by the Tribunal. First of all, the article deals with the qualification by the Tribunal of the Italian investors’ mass claims as treaty claims (rather than as contractual claims). Secondly, the qualification of the Claimants’ security entitlements in the Argentine bonds as investments made in Argentine territory pursuant to Article 1(1) of the Argentina-Italy BIT is analysed. Finally, the method and the reasoning followed by the Tribunal in order to admit bondholders’ mass claims under the BIT in ICSID arbitration are critically discussed. In this respect, the conclusion is drawn that the Tribunal has conflated questions regarding jurisdictional subjective requirements under the ICSID Convention and Argentina-Italy BIT with questions of claims’ admissibility as well as issues related to parties’ consent to ICSID arbitration under the Argentina-Italy BIT with mere procedural issues.