CMS Gas Transmission Co. v. Argentine Republic

The International Centre for Settlement of Investment Disputes (ICSID) is a dispute-resolution body created by treaty. Under this treaty (Convention), domestic courts are not empowered to review ICSID tribunal decisions. The Convention does, however, afford parties an opportunity to challenge awards granted by these tribunals. Upon a challenge, an ad hoc committee evaluates whether annulment is proper based on one or more of five specific grounds as provided in Article 52 of the Convention, including: (1) the tribunal was improperly convened, (2) the tribunal manifestly exceeded its powers, (3) a member of the tribunal engaged in corruption, (4) a fundamental rule of procedure was materially violated, or (5) the tribunal did not provide the reasoning behind the granted award. During its evaluation, an ad hoc committee must only determine the soundness of the tribunal’s decision-making process, and must not concern itself with the appropriateness of the amount of the award. Argentina (defendant) petitioned for annulment of an award that an ICSID tribunal had mandated Argentina to pay to CMS Gas Transmission Company (plaintiff), where the tribunal made its decision based on the premise that the definition of necessity in Article XI of the U.S.-Argentine Bilateral Investment Treaty (BIT) was the same as the definition based on customary international law as codified by Article 25 of the Articles on State Responsibility of the International Law Commission (ILC).