An investment treaty (Treaty) between the United Kingdom and Argentina authorizes a party to submit a dispute “to the decision of the competent tribunal of the Contracting Party in whose territory the investment was made,” i.e., a local court, Art. 8(1); and permits arbitration, as relevant here, “where, after a period of eighteen months has elapsed from the moment when the dispute was submitted to[that] tribunal . . . , the said tribunal has not given its final decision,” Art. 8(2)(a)(i).

Petitioner BG Group plc, a British firm, belonged to a consortium with a majority interest in MetroGAS, an Argentine entity awardedan exclusive license to distribute natural gas in Buenos Aires. At the time of BG Group’s investment, Argentine law provided that gas “tariffs” would be calculated in U. S. dollars and would be set at levels sufficient to assure gas distribution firms a reasonable return. But Argentina later amended the law, changing (among other things) thecalculation basis to pesos. MetroGAS’ profits soon became losses.Invoking Article 8, BG Group sought arbitration, which the parties sited in Washington, D. C. BG Group claimed that Argentina’s new laws and practices violated the Treaty, which forbids the “expropriation” of investments and requires each nation to give “fair and equitable treatment” to investors from the other. Argentina denied thoseclaims, but also argued that the arbitrators lacked “jurisdiction” tohear the dispute because, as relevant here, BG Group had not complied with Article 8’s local litigation requirement. The arbitration panel concluded that it had jurisdiction, finding, among other things,that Argentina’s conduct (such as also enacting new laws that hindered recourse to its judiciary by firms in BG Group’s situation) had excused BG Group’s failure to comply with Article 8’s requirement.