BG Group v. Republic of Argentina: A Supreme Misunderstanding of Investment Treaty Arbitration

Abstract

In BG Group, PLC v. Republic of Argentina, a divided U.S. Supreme Court determined for the first time the standard of review of an investment treaty award. The Court held that because the requirement in the U.K.-Argentina Bilateral Investment Treaty (BIT) that the investor first litigate its dispute in national courts was merely a procedural prerequisite to investor-state arbitration--rather than a substantive condition of consent to the treaty itself--U.S. courts could not review de novo the jurisdictional basis of the resulting arbitral award but instead had to accord the award appropriate deference. While the result may be correct, the reasoning is not.