Leviathan on Life Support? Restructuring Sovereign Debt and International Investment Protection After Abaclat

Abstract

This chapter focuses on the 2011 jurisdictional decision in Abaclat et al. v. Argentina, the first International Centre for Settlement of Investment Disputes (ICSID) decision to green-light a group bondholder claim brought pursuant to a bilateral investment treaty following a sovereign debt restructuring. The decision was subject to a substantial dissent. It is argued that the majority, as well as the dissenting opinion should have accorded greater interpretative significance to the ordinary meaning of the treaty text and the drafting history of the ICSID Convention. In particular, more attention should have been paid to determining what is unique about sovereign bonds, rather than devoting substantial eff ort to debating whether debt obligations constitute “investments” for the purposes of Article 25(1) ICSID Convention.