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11CMSEnronSempraLGECMSCMSEnronSempraCMSLGELGECMSEnronSempraCMSEnronSempraSemprawww.fulbright.comApril2011EnronSempraandAnnulmentseconomiccrisesormajoreconomicemergenciesbutdisagreedontheinterpretationofandtherelationbetweenthetwoprovisions.TheandtribunalsequatedthetwoprovisionswhereasthetribunalandlatertheAnnulmentCommitteeconsideredthemdifferentandthattheysetdifferentthresholdsfordeterminingtheexistenceofastateofnecessity.BasedonthisinterpretationaldifferencetheandtribunalsfoundthatArgentinahadviolatedthefairandequitabletreatmentstandardandtheumbrellaclauseintheBITandthatArgentinawasnotunderastateofnecessitywhichmadeitfullyresponsibleforcompensatinglossessufferedbythecompaniesasaresultoftheBITviolations.EachtribunalthenawardedmorethanUS100milliontotherespectiveclaimantslatertheAnnulmentCommitteesetasidepartoftheoriginaltribunalsreasoningbutdidnotchangethedamagesawarded.ThetribunalhoweverfoundthatArgentinabetween1December2001to26April2003wasunderastateofnecessityasdefinedunderArticleXIoftheBITandthereforewasnotliablefordamagesduringthatperiod.FortheperiodinwhichArgentinawasnotunderastateofnecessitythetribunalawardedmorethanUS50million.ItshouldbenotedthatundertheILCArticle27ifaStatesuccessfullyinvokesastateofnecessitydefenseunderILCArticle25itisstillresponsibleforcompensatingthelossescausedasaresultofitsacts.ArticleXIoftheBIThoweverdidnotappeartocontainasimilarrequirementthereforeifinvokedsuccessfullyitcouldfullyeliminateresponsibilityincludingthatforcompensatingloss.Thisseemstobetheapproachthetribunaladopted.PartiestodisputesledundertheICSIDConventionhavetherighttochallengearbitralawardsbeforeanannulmentcommitteeanarbitraltribunalconstitutedsolelyforthepurposeofreviewingtheoriginaltribunalsdecisionsimilartoanappellatecourtbutwithaverylimitedscopeofreviewusingICSIDsannulmentmechanism.ThelimitedgroundsforchallengearesetforthinICSIDConventionArticle52andincludeatribunalexercisingamanifestexcessofpowerandorfailingtostatereasonsforitsaward.Argentinasystematicallytriedtoannulalltheadversearbitraldecisionsincludingthoseintheandcases.TheAnnulmentCommitteefoundmistakesintheoriginaltribunalsanalysisbutdidnotannulitsprincipalholdings.Thecommitteediddisagreewiththetribunalsequationofthetwonecessityprovisionsinsteadndingthattheywerenotequalandtobeappliedindependently.FollowingthatdecisioninJulyandAugust2010twodifferentAnnulmentCommitteesfullyannulledtheanddecisions.Withrespecttoforexamplethecommitteeheldthat207.InthiscasetheCommitteefindsthatthefollowingsentenceinparagraph388oftheAwarddemonstratesthattheTribunalfailedtoapplytheapplicablelawSincetheTribunalhasfoundabovethatthecrisisinvokeddoesnotmeetthecustomarylawrequirementsofArticle25oftheArticlesonStateResponsibilityitconcludesthatnecessityoremergencyisnotconduciveinthiscasetothepreclusionofwrongfulnessandthatthereisnoneedtoundertakeafurtherjudicialreviewunderArticleXIgiventhatthisArticledoesnotsetoutconditionsdifferentfromcustomarylawinsuchregard.208.TheTribunalhasheldineffectthatthesubstantivecriteriaofArticleXIsimplycannotfindapplicationwhererulesofcustomaryinternationallawasenunciatedintheILCArticlesdonotleadtoexonerationincaseofwrongfulnessandthatArticle25trumpsArticle