Introduction

Necessity, it is often said, is the mother of invention. However, in the context of international law, and the tribunals which apply and interpret it, perhaps it is more appropriate to say that necessity is the source of an exception, one that is meant to preclude the wrongfulness of conduct by States in times of crisis, when the conduct in question results in a breach of international law. Indeed, the invocation of the necessity doctrine as a defence has linked such diverse governmental interests as fur seal trading, food supplies, provisions for troops and government bonds. Over its history, the necessity doctrine – and its legal antecedents – has encompassed a variety of emergencies giving rise to the necessity designation, key among them being the environmental and financial needs of the State.

The necessity doctrine has been analysed by the United Nations International Law Commission (ILC) and several international tribunals. Recently, it has also been the subject of several investment cases regarding emergency measures taken by the Argentine government earlier this decade (the Argentine cases). The cases against Argentina constitute a significant part of the International Centre for Settlement of Investment Dispute (ICSID) arbitral work today – as of August 2010, out of a total of 125 cases pending before the ICSID, 27 were filed against Argentina; the majority of which relate to the Argentine financial crisis and involve the necessity doctrine at some level. Despite the many instances in which the doctrine has been invoked in the Argentine context, the ‘Argentine tribunals’ have been inconsistent in their interpretation and application of the necessity doctrine. This inconsistency has been described as potentially damaging as such conflicting results may lead to credibility loss and instability within the investment arbitration system. Furthermore, conflicting results also generate uncertainty regarding the right use of the necessity doctrine during crises.