Originally from Dispute Resolution Journal

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I. INTRODUCTION

In the market of sovereign debt instruments, the risk of a default by
the issuing state has always been a concern for the creditors. As the
world has grown more complex and interconnected, the sovereign
debt market has grown too, but without developing any sovereign
debt restructuring mechanisms. As a result, when Argentina defaulted
in its debt obligations in 2001, creditors looked for fora where to
assert their rights, and in the midst of a wave of other claims, it was
only a matter of time until investment tribunals had to deal with cases
directly related to Argentina’s sovereign debt restructuring. Now that
the first decisions about preliminary objections on these cases provide
sufficient elements for study, an analysis of those awards is adequate
to consider the specific problems faced in these complex scenarios.

The aim of this article is thus to analyze some of the elements of
the three ICSID cases which, to date, involve collective actions in
sovereign debt restructuring: Abaclat,1 Ambiente Ufficio,2 and
Alemanni.3 It should be noted that these cases deal with a great
variety of issues, but I will only focus on those which are more likely
to be found in collective cases about sovereign restructuring. In this
regard, two main topics will be discussed: whether sovereign debt
instruments should be granted investment protection, and whether it is
possible to arbitrate claims under the ICSID Convention with an
unusually high number of claimants.

For that purpose, this article is structured in the following manner:
In section two, I briefly analyze the legal nature of proceedings like
the ones at hand, which involve an unusual number of claimants.
Section three then deals with some of the most relevant points to
establish jurisdiction ratione materia: whether sovereign bonds
constitute an investment under the ICSID Convention and the BIT,
and whether they comply with the requirement of being made “in the
territory” of the host state. Section four focuses on specific matters
which were raised in relation to the claimants’ consent due to the
collective nature of the proceedings. Similarly, section five turns to
questions about the respondent’s consent to arbitrate proceedings with
multiple claimants. Section six is devoted to study the possible
procedural impact of the collective nature of the proceedings. Finally,
in section seven I analyze some of the previous elements from a
policy perspective, just before adding some concluding remarks in
section eight.

II. NATURE OF THE PROCEEDINGS

An initial question refers to the exact nature of the process in these
cases, which can potentially allow the accumulation of a large amount
of claimants. This issue was discussed to a certain extent in the
Abaclat case and briefly in Ambiente Ufficio, and although it might
seem merely a terminological discussion, it can provide a general
framework for the analysis and assist clarifying some of the real
issues behind the changing terminology.

The Abaclat tribunal described the nature of the process as “mass
proceedings”.4 Based on an article of Stacie I. Strong,5 the tribunal
started its reasoning differentiating between representative and
aggregate proceedings.6 Regarding the former type of proceedings,
neither the cited article nor the tribunal provides a specific definition,
albeit it is implied that the American system of class actions is the