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Authors

Melody Mahla

First Paragraph

Faced with a financial crisis in 1989, Argentina instituted several privatization efforts in an attempt to resuscitate its floundering national economy. A second fiscal downturn forced the Argentine government to rescind these privatization schemes in 2001. Sempra Energy International ("Sempra"), an American company that had capitalized on Argentina's economic revitalization attempts by investing in several of Argentina's natural gas providers, challenged Argentina's bailout efforts and invoked arbitration proceedings, insisting that Argentila had violated the Bilateral Investment Treaty ("BIT") between Argentila and the United States. The arbitrational tribunal ("Tribunal") agreed and issued a $75 million award in Sempra's favor. On January 25, 2008, the Republic of Argentina ("Argentina") submitted a request with the International Centre for the Settlement of Investment Disputes ("ICSID") for the annulment of the Tribunal's award. In its request for annulment, Argentina insisted that the Tribunal had been improperly constituted, had "manifestly exceeded its powers," had violated a fundamental procedural rule, and had failed to provide an adequate explanation for its decisions. Upon ICSID's granting of a provisional stay of enforcement of the Tribunal's Award, an ad hoc committee was convened to deliberate over Argentina's annulment application. In ultimately determining that the Tribunal had "made a fundamental error in identifying and applying" the relevant law, the ad hoc committee held that the Tribunal had exercised a "manifest excess of powers" and annulled its award.

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