International decisions: Judicial review of investment treaty awards: Bg group V. Argentina

On March 5, 2014, the United States Supreme Court, in BG Group PLC v. Republic of Argentina, (1) ruled for the first time on the standard of review U.S. courts should apply when examining investment treaty awards to determine whether an arbitral tribunal exceeded its powers. In a 7-2 split, with a concurrence, the majority adopted a highly deferential standard of review based on interpretive presumptions developed under U.S. domestic law for arbitration agreements found in ordinary contracts between private parties. The dissent, by contrast, opted for a de novo standard of review based on the recognition that states have delegated an important function of policing arbitral decisions on jurisdiction to national courts and that particular care is required when this function is exercised in investor-state disputes founded on interstate treaties. The dissent's approach is preferable because it appreciates the public international law basis and public law nature of investment treaty arbitration, which differs in important ways from contractual arbitration between private parties.