ADJUDGING THE EXCEPTIONAL AT INTERNATIONAL INVESTMENT LAW: SECURITY, PUBLIC ORDER AND FINANCIAL CRISIS

This article examines the impact of international law on the ability of States to mitigate the effects of financial crises. It focuses on the invocation of investment treaty disciplines in the aftermath of the 2001–2002 Argentine financial crisis, and the adjudication of Argentina's defence of a state of necessity under both subject treaties and at customary international law. The article uncovers three interpretative methods in the jurisprudence on the relationship between the treaty exception and customary plea of necessity: methodologies I (confluence), II (lex specialis) and III (primary-secondary applications). Method I is the dominant approach in the jurisprudence and the most restrictive of the three readings. The article argues that method I is mistaken both on a careful interpretation of the two legal standards and on a broader historical analysis of the emergence of investment treaty norms. Given these substantive flaws, the article isolates the motivations to account for the popularity of this method through a close reading of the awards. These reveal continuing tensions in the field, not least the problematic suggestion that a single value of protection should exclusively inform our understanding of the purpose of investment treaties. These sociological features of investor–State arbitration should, it is suggested, inform our choice on other interpretative methods. This comes down to an election between methods II (lex specialis) and III (primary–secondary applications). Method III is the most convincing and coherent reading of the relationship between the two legal standards. The article concludes by offering a framework to address the key interpretative questions implicated in that method: (a) the identification and scope of the notion of ‘public order’ and a State's ‘essential security interests’; and (b) the appropriate test of ‘necessity’ or means–end scrutiny.