THE APPLICABILITY OF THE 'NECESSITY' STANDARD TO INVOKE 'NON-PRECLUDED MEASURE' DEFENSES UNDER INTERNATIONAL INVESTMENT LAW

Abstract

The 'necessity' standard is established as a centerpiece of the laws of state responsibility that enable states to justify unlawful measures under international law. However, the application of the standard has witnessed significant controversy in the invocation of 'non-precluded measure' defenses under international investment law. This controversy is best demonstrated in the series of investor- state arbitral proceedings initiated by numerous foreign investors against Argentina as a result of the 2002 Argentinian financial crisis. Here, different arbitral tribunals assessed the 'necessity' standard in different ways, hence producing differing conclusions regarding the responsibility of Argentina in invoking non-precluded measures. This paper will examine the extent to which 'necessity' is an appropriate standard to invoke non- precluded measure defenses under international investment law.