Several arbitral awards rendered against Argentina under bilateral investment treaties and related to the country’s devastating economic crisis in 2001–2002 restrictively interpreted Argentina’s ability to rely on either the exception clause in the US-Argentina investment treaty or the necessity defence under customary
international law. In three cases (CMS, Sempra, and Enron), the tribunals, by simply equating the requirements under the treaty exception with those of the customary necessity defence, all but ignored established canons of treaty interpretation and engaged in doctrinally muddled analyses of the relationship between treaty law and customary law. All three awards have since been subject to annulment decisions by ICSID ad hoc committees. While the decisions disagree on what constitutes an appropriate reason for annulment under the manifest excess of powers ground, they off er doctrinally much improved approaches to the interpretation and application of both treaty exceptions and the necessity defence. Identifying the proper dividing line between permissible annulment review and impermissible appellate review in such contexts has been, and will remain, contentious, but the Sempra and Enron committees off er reasonable assessments of when an error of law becomes so grave as to result in actual failure to apply the proper law.