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This document is the decision of the ad hoc Committee constituted under Article 52 of the ICSID Convention to rule on the Argentine Republic's application for the annulment of the Award rendered on 12 May 2005 in favor of CMS Gas Transmission Company. Argentina sought annulment on the grounds that the Tribunal had manifestly exceeded its powers and failed to state the reasons on which the Award was based (Article 52(1)(b) and (e) of the ICSID Convention).
The Committee partially granted the application, annulling a specific part of the Award, while dismissing the remainder of Argentina's claims. The Committee upheld the Tribunal's findings on the Claimant's jus standi as a shareholder, the breach of the fair and equitable treatment (FET) standard, and the calculation of compensation, finding no manifest excess of powers or failure to state reasons on these points. Regarding Argentina's defense of necessity, the Committee identified manifest errors of law in the Tribunal's conflation of the treaty-specific defense in Article XI of the Argentina-US BIT with the customary international law defense of necessity. However, it concluded that because the Tribunal did ultimately apply Article XI, albeit defectively, this did not constitute a reviewable defect under the narrow standard of Article 52.
The central basis for the partial annulment was the Tribunal's finding on the umbrella clause (Article II(2)(c) of the BIT). The Committee found that the Award contained a significant lacuna in its reasoning on this issue, amounting to a failure to state reasons. Specifically, the Tribunal failed to explain the legal basis upon which CMS, as a shareholder, could enforce obligations that Argentina had undertaken towards the local investment company, TGN, under its license. The Committee found it impossible to follow the Tribunal's reasoning from its premises to its conclusion on this point, thereby justifying annulment of that specific finding.
Consequently, the Committee annulled sub-paragraph 1 of the Award's dispositif insofar as it found a breach of the umbrella clause. All other claims for annulment were dismissed. The decision lifted the stay on the enforcement of the remainder of the Award and established a new timeline for Argentina to exercise its option to purchase CMS's shares in TGN. The costs of the annulment proceeding were ordered to be borne equally by the parties.
