ICSID CASE NO. ARB/07/5 INTERNATIONAL CENTRE FOR SETTLEMENT OF INVESTMENT DISPUTES WASHINGTON, D.C. ABACLAT AND OTHERS (Case formerly known as GIOVANNA A BECCARA AND OTHERS*) (CLAIMANTS) and THE ARGENTINE REPUBLIC (RESPONDENT) __________________________________ DECISION ON JURISDICTION AND ADMISSIBILITY __________________________________ ARBITRAL TRIBUNAL Professor Pierre Tercier, President Professor Georges Abi-Saab, Arbitrator Professor Albert Jan van den Berg, Arbitrator Secretary to the Tribunal: Mr. Gonzalo Flores Date of dispatch to the Parties: 4 August 2011 ICSID CASE NO. ARB/07/5 Representing Giovanna a Beccara and Representing The Argentine Republic others Dra. Angélina María Esther Abbona Ms. Carolyn B. Lamm Procuradora del Tesoro de la Nación Argentina Mr. Jonathan C. Hamilton Procuración del Tesoro de la Nación Argentina Ms. Abby Cohen Smutny Posadas 1641 Ms. Andrea J. Menaker Buenos Aires (C.P. 1112) Mr. Francis A. Vasquez, Jr. Argentina WHITE & CASE LLP 701 Thirteen Street, N.W. and Washington, D.C. 20005 U.S.A. Mr. Jonathan I. Blackman Mr. Matthew D. Slater and Mr. Carmine D. Boccuzzi Ms. Inna Rozenberg Avv. Vittorio Grimaldi Mr. Ezequiel Sánchez Herrera Avv. Paolo Marzano CLEARY GOTTLIEB STEEN & HAMILTON LLP GRIMALDI E ASSOCIATI One Liberty Plaza Via Pinciana, 25 New York, NY 10006 00198 Rome U.S.A. Italy and Dr. José Martínez de Hoz, Jr. Dra. Valeria Macchia PEREZ ALATI, GRONDONA, BENITZ, ARNTSEN & MARTINES DE HOZ (JR.) Suipacha 1111 – Piso 18 C1008AAW Buenos Aires Argentina * For the change of name, see § 641 below. 1 ICSID CASE NO. ARB/07/5 Table of Contents I. PARTIES ........................................................................................................................................ 10 A. CLAIMANTS .......................................................................................................................... 10 B. RESPONDENT ........................................................................................................................ 11 II. FACTS ............................................................................................................................................ 12 A. INTRODUCTION ..................................................................................................................... 12 (1) General Concepts relating to Financial Market and Bonds ...................................... 12 (2) General Overview on Sovereign Debt Restructuring ............................................... 17 (3) Argentina‘s Restructuring of Its Economy and Its Debt in relation to Bonds .......... 22 (a) Argentina‘s Restructuring of Its Economy in the 1990s ................................ 22 (b) Argentina‘s Financial Crisis and Default of 2001 ......................................... 26 (c) The Events following Argentina‘s Default of 2001 ....................................... 28 (d) Argentina‘s Restructuring of Its Debt in relation to Bonds and Relevant Creditors‘ Reactions ...................................................................................... 28 (4) Evolution of the Dispute following Argentina‘s Exchange Offer 2005 .................... 39 (5) New Exchange Offer 2010 ....................................................................................... 50 B. PROCEDURAL HISTORY ......................................................................................................... 51 (1) Request for Arbitration and its Registration by ICSID ............................................. 51 (2) Constitution of the Arbitral Tribunal ........................................................................ 53 (3) Arbitral Procedure .................................................................................................... 55 III. LAW................................................................................................................................................ 77 A. INTRODUCTORY REMARKS ................................................................................................... 77 (1) The Arbitral Procedure ............................................................................................. 77 (2) Object of the Present Decision .................................................................................. 78 (3) Summary of the Parties‘ Positions and Relief Sought .............................................. 79 (a) Respondent‘s Position and Requests for Relief ............................................. 80 (b) Claimants‘ Position and Requests for Relief ................................................. 84 (4) Structure of the Present Decision .............................................................................. 87 B. LEGAL BASIS FOR THE TRIBUNAL‘S JURISDICTION ............................................................... 90 (1) Article 25 ICSID Convention ................................................................................... 91 (2) Argentina-Italy BIT .................................................................................................. 93 2 ICSID CASE NO. ARB/07/5 (a) General Scope and Aim of the Argentina-Italy BIT ...................................... 94 (b) Article 8 BIT ................................................................................................. 96 (3) Relationship between Article 25 ICSID Convention and Article 8 BIT ................. 102 (a) In General .................................................................................................... 102 (b) With regard to the Subject Matter of the Dispute ........................................ 102 (c) With regard to the Parties ............................................................................ 104 (d) With regard to the Procedure to Be Followed ............................................. 106 (4) Other Relevant Legal Provisions and Principles ..................................................... 107 (5) ICSID, BIT and Mass Claims ................................................................................. 107 C. THE ARBITRAL TRIBUNAL‘S JURISDICTION ........................................................................ 109 (1) Introductory Remarks ............................................................................................. 109 (2) Legal Dispute Arising out of the BIT – Issues 7 & 6.............................................. 109 (a) Issues at Stake and Relevant Legal Provisions ............................................ 109 (b) Parties‘ Positions ......................................................................................... 112 (c) Tribunal‘s Findings ..................................................................................... 115 (i) Alleged Breaches of the BIT ......................................................................... 115 (ii) Contract Claims v. Treaty Claims ................................................................ 118 (iii) Potential Contract Claims against the Italian Banks .................................... 121 (d) Conclusion ................................................................................................... 122 (3) Legal Dispute relating to an Investment – Issues 9 & 8 ......................................... 123 (a) Issues and Relevant Legal Provisions.......................................................... 123 (b) Parties‘ Positions ......................................................................................... 128 (c) Tribunal‘s Findings ..................................................................................... 133 (i) Definition and Role of an Investment – In General....................................... 133 (ii) Investment under Article 1(1) BIT ................................................................ 137 (iii) Investment under Article 25 ICSID Convention ............................................ 141 (iv) Two Alternative Views on “Investment” Lead to the Same Result ................ 142 (v) Made in Argentina ........................................................................................ 144 (vi) In Compliance with the Law ......................................................................... 147 (d) Conclusion ................................................................................................... 149 (4) Between Argentina and Italian Investors - Issues 10 & 11 ..................................... 150 (a) Issues and Relevant Legal Provisions.......................................................... 150 (b) Parties‘ Positions ......................................................................................... 156 (c) Tribunal‘s Findings ..................................................................................... 158 (i) Jurisdiction Rationae Personae – In General ............................................... 158 (ii) With regard to Natural Persons .................................................................... 159 (iii) With regard to Juridical Persons .................................................................. 161 (d) Conclusion ................................................................................................... 165 (5) Subject to the Claimants‘ Written Consent – Issue 2 .............................................. 166 3 ICSID CASE NO. ARB/07/5 (a) Issues and Relevant Legal Provisions.......................................................... 166 (b) Parties‘ Positions ........................................................................................