INTERNATIONAL CENTRE FOR THE SETTLEMENT OF INVESTMENT DISPUTES WASHINGTON, D.C. EDF INTERNATIONAL S.A. SAUR INTERNATIONAL S.A. and LEON PARTICIPACIONES ARGENTINAS S.A. v. ARGENTINE REPUBLIC (ICSID Case No. ARB/03/23) Annulment Proceeding DECISION Members of the ad hoc Committee Sir Christopher Greenwood, CMG, QC, President Professor Teresa Cheng, SC Professor Yasuhei Taniguchi Secretary to the ad hoc Committee Ms Anneliese Fleckenstein Date of dispatch to parties: 5 February 2016 Representing the Argentine Republic: Representing EDF International et al: Dr. Angelina Abbona Mr. Paolo Di Rosa Procuradora del Tesoro de la Nación Arnold & Porter, LLP (until 16 December 2015) 601 Massachusetts Avenue, NW Dr. Carlos Francisco Balbín Washington, DC 20001 Procurador del Tesoro de la Nación United States of America Procuración del Tesoro de la Nación and Posadas 1641 Mr. Michael R. Rattagan C1112ADC Buenos Aires Mr. Ricardo Barreiro Deymonnaz Argentina Rattagan, Macchiavello, Arocena & Peña Robirosa Abogados Torre Alem Plaza Avenida Leandro N. Alem 855, piso 8 C1001AAD Buenos Aires Argentina ii TABLE OF CONTENTS Acronyms and Abbreviations .............................................................................................................vii I. Introduction .................................................................................................................................... 1 A. Procedural History of the Annulment Proceedings ............................................................... 1 B. Brief History of the Dispute .................................................................................................. 4 C. Summary of the Jurisdiction Decision and Award ................................................................ 7 1. The Jurisdiction Decision ...................................................................................................... 7 2. The Award ............................................................................................................................. 9 a. Applicable law ................................................................................................................... 9 b. The “umbrella clause” and Argentina’s compliance with specific commitments ........... 10 c. Fair and equitable treatment ............................................................................................. 12 d. Claims in respect of actions taken before the emergency ................................................ 12 e. Other claims ..................................................................................................................... 13 f. Argentina’s defences ........................................................................................................ 13 g. Quantum of Damages ...................................................................................................... 14 II. Grounds for Annulment ............................................................................................................... 14 A. Challenges to Two Members of the Tribunal ...................................................................... 15 B. Applicable Law ................................................................................................................... 16 C. Derivative Rights and the Umbrella Clause ........................................................................ 17 D. Necessity ............................................................................................................................. 18 E. Failure to Decide on Fundamental Evidence ...................................................................... 18 F. Failures in the Assessment of Damages .............................................................................. 18 III. The Nature of Annulment and the Powers of an ad hoc Committee ........................................... 19 IV. Challenges to Two Members of the Tribunal ............................................................................... 24 iii A. Introduction ......................................................................................................................... 24 B. The facts .............................................................................................................................. 24 1. Professor Kaufmann-Kohler................................................................................................ 24 2. Professor Remón ................................................................................................................. 27 C. Arguments of the Parties ..................................................................................................... 28 1. Argentina ............................................................................................................................. 28 a. General ............................................................................................................................. 28 b. Professor Kaufmann-Kohler ............................................................................................ 29 c. Professor Remón .............................................................................................................. 31 2. The Claimants ..................................................................................................................... 32 a. General ............................................................................................................................. 32 b. Professor Kaufmann-Kohler ............................................................................................ 33 c. Professor Remón .............................................................................................................. 35 D. The Decision of the Committee .......................................................................................... 36 1. The Legal Framework ......................................................................................................... 36 a. Article 14(1) of the Convention ....................................................................................... 36 b. The Convention Machinery for Challenging an Arbitrator ............................................. 39 c. The Role of an ad hoc Committee ................................................................................... 40 (1) The role of an ad hoc committee where no challenge has been made under Article 57 ..................................................................................................................................... 44 (2) The role of an ad hoc committee where a challenge has been made, and rejected, under Article 57 ........................................................................................................... 48 2. Professor Kaufmann-Kohler................................................................................................ 52 3. Professor Remón ................................................................................................................. 60 V. Applicable Law Issues ................................................................................................................. 65 A. Introduction ......................................................................................................................... 65 iv B. Parties’ Arguments .............................................................................................................. 66 1. Argentina ............................................................................................................................. 66 2. The Claimants ..................................................................................................................... 68 C. The Decision of the Committee .......................................................................................... 69 1. The Legal Framework ......................................................................................................... 69 a. Manifest excess of powers (Article 52(1)(b) of the Convention) .................................... 69 b. Failure to state reasons (Article 52(1)(e) of the Convention) .......................................... 71 c. Serious departure from a fundamental rule of procedure (Article 52(1)(d)) ................... 73 2. Application of the Argentina-France BIT and Non-Application of the Argentine- Luxembourg BIT ................................................................................................................. 75 3. Non-Application of Argentine Law .................................................................................... 82 4. Discrimination ..................................................................................................................... 85 VI. Derivative Rights and Umbrella Clause Issues ............................................................................ 86 A. The Relevant Treaty Provisions .......................................................................................... 86 B. The Issues raised by Argentina and the Decision of the Committee................................... 89 a. The MFN Clause and the Umbrella Clauses .................................................................... 89 (1) Parties’ Positions.......................................................................................................... 89 (2) The Decision of the Committee ..................................................................................