## Facts

- Continental Casualty Company (U.S.) owned an Argentine workers’ compensation insurer (CNA ART) and held Argentine securities and bank deposits as part of its investment.
- Argentina’s 2001–2002 financial crisis led to emergency measures affecting financial assets, including limits on transferring funds abroad, freezes and rescheduling of deposits, and forced conversion of U.S.-dollar obligations into pesos at non-market rates.
- Continental alleged the measures undermined its hedging strategy, reduced the value of its financial assets, and breached protections in the Argentina–U.S. BIT, including fair and equitable treatment (linked to customary international law), protection against expropriation, an umbrella clause, and free-transfer obligations.
- The arbitration proceeded under the ICSID Convention; jurisdiction was affirmed in 2006, and the merits were decided by an award in 2008.
- Continental sought approximately $114 million in damages.

## Issues

1. Whether Argentina’s crisis measures breached the BIT’s fair and equitable treatment obligation as tied to customary international law (minimum standard of treatment).
2. Whether the measures constituted direct or indirect expropriation under the BIT.
3. Whether Argentina breached specific undertakings actionable under the BIT’s umbrella clause.
4. Whether restrictions on moving funds abroad violated the BIT’s free-transfer obligation.
5. Whether the measures were justified by the BIT’s non-precluded measures clause (Article XI) and/or customary international law necessity.

## Decision

- The tribunal found Argentina partially liable, concluding that certain conduct breached the minimum standard of treatment, while rejecting other alleged breaches.
- The tribunal rejected the expropriation claim, treating the challenged acts as general, non-discriminatory crisis regulation that did not permanently deprive the investor of its investment or transfer it to the state.
- The tribunal dismissed the umbrella clause claim, finding no sufficiently specific commitments that could convert general regulatory frameworks into enforceable treaty undertakings.
- The tribunal applied Article XI to excuse many emergency measures taken to address a grave economic and social crisis implicating public order and essential security interests, but treated Article XI as measure-specific rather than a blanket defense.
- The tribunal awarded approximately $2.8 million plus interest, substantially reducing claimed damages based on causation and the allocation of losses to market-wide crisis conditions rather than treaty-inconsistent measures.
- A later annulment application by Argentina was dismissed, leaving the award in force.

## Legal Principles

- Where a BIT links fair and equitable treatment to international law, the standard may be assessed as the customary international law minimum standard of treatment rather than an autonomous, higher standard.
- Legitimate expectations and reasonableness are evaluated in context, including the regulatory setting and the foreseeability of economic and regulatory change during severe crisis conditions.
- A non-precluded measures clause protecting actions “necessary” for public order or essential security interests can excuse certain emergency measures, but requires scrutiny of whether the specific measures were necessary and appropriately connected to the crisis.
- General, non-discriminatory regulatory measures adopted in an emergency, even if economically harmful, do not necessarily amount to indirect expropriation absent a permanent deprivation or equivalent taking.
- Umbrella clauses generally require proof of specific commitments; broad legislative or policy regimes are not automatically elevated into treaty obligations.
- Damages in investment arbitration require a close causal link; tribunals may exclude losses attributable primarily to general market collapse rather than to the treaty breach.

## Conclusion

The tribunal held that Argentina’s crisis response was largely protected by the BIT’s non-precluded measures clause but still found a limited breach of the minimum standard of treatment, resulting in a relatively small damages award after separating crisis-driven market losses from harm caused by treaty-inconsistent conduct.


Continental Casualty Co. v. Argentine Republic, ICSID Case No. ARB/03/9 (Sept. 5, 2008)