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Total v. Argentina

Type of decisionDecision on Liability
Date of decision27 December 2010
Tribunal
Giorgio Sacerdoti (President)
Luis Herrera Marcano
Henri C. Alvarez (dissenting)
Legal instrumentBIT between Argentina and France (1991)
Related decision(s)Decision on objections to jurisdiction, 25 August 2006
Further information

Statements from this decision

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While different tribunals should seek to act consistently with one another, there is no doctrine of precedent
Article 25 ILC Articles on State Responsibility codifies the customary international law regarding the concept of necessity
The FET standard is derived from the requirement of good faith as a general principle of law
A state's formal declaration constitutes a unilateral act, which gives rise to obligations on which third parties may rely
A breach of an IIT can be found irrespective of a breach of domestic law, but a breach of domestic law may entail a breach of international law
If an IIT explicitly deems domestic legislation applicable, the economic rights of the investor have to be determined according to the domestic legal system; the host state cannot, however, avoid responsibility for a treaty breach by invoking internal law
Although a statement in a preamble does not create legal obligations, it sheds light on the object and purpose of the treaty
Article 25 ILC Articles on State Responsibility codifies the customary international law regarding the concept of necessity
The host state has to prove that the requirements of a rule precluding wrongfulness were met
Even if there is no explicit provision in an IIT, a measure is equivalent to an expropriation if it causes an effective deprivation of the investment; a deprivation is effective if there is a total loss of value of the property
In requiring a loss of material control over an investment, the phrase "measure having a similar effect of dispossession" is more restrictive than the phrase "tantamount to expropriation"
If an IIT requires "fair and equitable treatment in conformity with the principles of international law", this cannot be read as "treatment required by the minimum standard under international law"
The standard of fair and equitable treatment can be distinguished from other standards of treatment in several ways
There is no abstract definition of what is fair and equitable; whether treatment was fair and equitable depends on the facts of the particular case
A comparative approach to defining what is fair and equitable is justified as the situation and conduct to be evaluated under an IIT occur within a domestic legal system
Once a contract has been authorised in accordance with domestic law, the subsequent withdrawal of the contractual rights constitutes unfair treatment
It is impossible to determine an "ordinary meaning" of the expression "fair and equitable"
The FET standard is derived from the requirement of good faith as a general principle of law
There is a conflict between the expectations of the investor regarding the stability of the legal environment and the regulatory interests of a host state
An investor cannot expect that the legal regime of the host state remains unchanged; however, an investor's expectation is legitimate and protected by the FET standard, if the host state explicitly assumes a specific legal obligation for the future
When examining an alleged breach of the FET standard, a tribunal has to take the investor's conduct into account, too
For determining a breach of the FET standard, a proportionality test may be required; a tribunal has to weigh the investor's reasonable expectations on the one hand, and the legitimate regulatory interest on the other hand
There is a conflict between the expectations of the investor regarding the stability of the legal environment and the regulatory interests of a host state
The protection by a "full protection and security" clause is not limited to physical protection, but includes legal security
A "losses due to war" clause cannot be interpreted as precluding the wrongfulness of a host state's breach of another standard of protection
A "losses due to war" clause is not applicable to an economic emergency, unless that emergency has caused losses similar to those of war, uprising or other kind of civil disturbance
Three step test for determining a violation of the national treatment standard
It does not make a difference whether or not the IIT explicitly requires nationals and foreigners to be in "like circumstances"; this element is inherent in an evaluation of discrimination
Measures of general application that practically resulted in different treatment cannot be considered discriminatory per se without any "in like circumstances" requirement
A de facto discrimination requires that the claimant presents a prima facie case of nationality-based discrimination without the respondent proving that the less favourable treatment is reasonable
A tribunal cannot award double recovery for the same damages to the same assets hypothetically caused by different IIT provisions, even if the methods of calculations were different
If an IIT explicitly deems domestic legislation applicable, the economic rights of the investor have to be determined according to the domestic legal system; the host state cannot, however, avoid responsibility for a treaty breach by invoking internal law
The host state has to prove that the requirements of a rule precluding wrongfulness were met
A tribunal cannot award double recovery for the same damages to the same assets hypothetically caused by different IIT provisions, even if the methods of calculations were different
Although a statement in a preamble does not create legal obligations, it sheds light on the object and purpose of the treaty

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