Beyond Abaclat: Mass Claims in Investment Treaty Arbitration and Regulatory Governance for Sovereign Debt Restructuring

In: The Journal of World Investment & Trade
Author: Kei Nakajima1
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  • 1 International Court of Justice, The Hague, The Netherlands

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Whereas investment treaties and arbitration rules do not usually provide any explicit provision for mass claims in investment treaty arbitration, the Tribunal in Abaclat v Argentina established a landmark jurisprudence that allowed a massive 60,000 investors to bundle and bring their claims before a single arbitral tribunal. However, its reasoning has been severely criticised for its conclusion, which apparently favours bondholder protection at the expense of financial policy leeway of defaulted sovereigns: investment arbitration may adversely affect the orderly implementation of sovereign debt restructuring. This article attempts to take a more balanced approach towards this issue, by focusing on regulatory aspects of arbitral proceedings. A ‘regulatory’ investment treaty arbitration will not only provide creditor protection by opening the door for mass claims, but will also show a deference to an orderly restructuring by closing the door if circumstances so require.