In the prior editions of this contribution, we defined concession contracts as instruments for the construction, financing and management of infrastructure and services of public interest,such as, for example, residential development, roads, ports, airports, mines, power plants, refineries and other energy-related projects. Among the main characteristics of concessions, we noted that they:
- imply a long-term relationship between a public entity and a private person;
- entail, by definition, the exposure of the project to changes in circumstances over the long term;
- have the key purpose of facilitating the access of sovereign states to private financing for public service projects; and
- are usually subject to significant state scrutiny and monitoring.
We then proceeded to address a number of issues and challenges in the relationship between the conceding entity and the concessionaire, arising out of these characteristics.These issues and challenges notwithstanding, we concluded that there was a trend in the increased and increasing tendency of private entities to resolve disputes arising out of concession contracts (both in the construction and other sectors) through treaty-based arbitration against the state hosting the concession. We take this conclusion as the starting point of the third edition of our contribution.
At the date of writing, such conclusion is consistent with the recently released yearly statistics of some of the main institutions administering international arbitrations. By way of example, the International Centre for Settlement of Investment Disputes (ICSID) has disclosed that, for the fiscal year 2018, it has registered a total of 56 new cases, that is, 6 per cent more than for the 2017 fiscal year.In 2018, 14 per cent of the new cases registered at ICSID came from the construction sector, while in 2017 some 11 per cent had come from this sector. This translates as an increase of over 3 per cent in the weight of construction arbitrations in the likewise increasing total caseload of ICSID. In comparison, the increase in cases arising in connection with a concession contract was of 20 per cent between 2017 and 2018, with eight new cases registered in the former year and 10 in the latter.
A similar trend is confirmed by the statistics published by the International Chamber of Commerce (ICC). In 2018, the ICC registered 842 cases, bringing its current caseload to 1,603 pending cases. Of these, some 40 per cent were construction/engineering and energy disputes.In fact, the ICC has disclosed that a new record had been achieved in 2018, ‘with the number of construction and engineering cases now reaching 224 new cases (i.e., 27 per cent of the caseload in 2018).’
In these circumstances of increased resort to investment treaty arbitration to resolve such disputes, in this updated contribution we consider, first, the circumstances that might justify resorting to this method of dispute resolution instead of accessing local courts or even triggering a potential arbitration clause included in the contract between the state or state-owned conceding entity (SOE) and the private entity concessionaire. We then proceed to consider the impact that investment treaty arbitration may have on the sovereign freedom to regulate, from the perspective of two short case analyses.
An easily justifiable increase in the choice of investment treaty arbitration as a dispute resolution mechanism
As we described in the previous edition of this contribution, at least four key elements justify the increasing tendency to resort to investment treaty arbitration in construction and concession-related disputes.
First, treaty-based arbitration offers an attractive dispute resolution avenue to stakeholders (with direct or indirect interest) in a project who may not have access to the contractually agreed-upon dispute resolution mechanism. Indeed, the latter requires privity.For example, the World Bank’s draft concession contract for the design, construction and operation of a toll highway includes a multi-tiered dispute resolution clause allowing for amicable resolution, followed by escalation to a dispute panel, and, ultimately, submission to international arbitration for contractual claims. The World Bank proposes the following model language:
If any Dispute […] has not been resolved between the Parties through an amicable settlement or the Dispute Panel procedure within [thirty (30) calendar] days of the receipt of the notice provided in clause (2), which shall each be a condition precedent, the Parties agree that the Dispute shall be referred to and finally settled by international arbitration as provided below. All arbitration proceedings with respect to the foregoing shall be conducted pursuant to the Rules of Arbitration of the International Chamber of Commerce (‘ICC Arbitration Rules’) which are deemed incorporated by reference into this PPP Contract. The following terms shall apply to the arbitration. The arbitration shall take place before a tribunal of three (3) arbitrators appointed in accordance with the said ICC Arbitration Rules (the ‘Arbitral Tribunal’).
Given that ‘the Parties’ are defined, in this context, as ‘[t]he Contracting Authority and the Private Partner […] collectively,’the cited contractual dispute resolution provision restricts access to these two contracting entities. Other stakeholders in the project, such as, for instance, shareholders or financers of the ‘Private Partner’ may be left without recourse against the ‘Contracting Authority’ in the event of a dispute.
One alternative to this, as mentioned in the prior version of this contribution, is to seek the extension of the arbitration agreement to a non-signatory. This can be done through the application of legal theories such as alter ego, the group of companies (or contracts) or piercing of the corporate veil. The arbitral tribunal constituted on the basis of the contractual dispute resolution clause will decide on its own jurisdiction, and, in particular, on whether or not the non-signatory party may be validly bound by such clause, whether as claimant (through a motion for joinder) or respondent.
Another alternative is treaty-based arbitration, which ordinarily does not require that the claimant be a party to the concession contract. In order to access this type of arbitration, the claimant must instead be a national of a state having concluded an international treaty for the protection of investments with the state hosting the concession. Most such treaties generally include both states’ consent to submit disputes with investors of the other state to arbitration (for example, under the auspices of ICSID, or of the Permanent Court of Arbitration and pursuant to the Arbitration Rules of the United Nations Commission on International Trade Law), in addition to setting out standards of protection that such investors are to be afforded by the host state. Upon commencing such an arbitration, the claimant in fact accepts the state’s offer to arbitrate and is able to invoke such standards of protection. The claimant must also have a protected investment. It is today widely recognised in international investment arbitration that activities related to a construction contract (and even more so a concession contract) may constitute such an investment,and thus qualify for the protection of a multilateral or bilateral investment protection treaty or a similar instrument. Indeed, recent case law has agreed that at least the following three elements are required to characterise an investment:
(i) a contribution or allocation of resources; (ii) a duration; and (iii) risk, which includes the expectation (albeit not necessarily fulfilled) of a commercial return.
It would be difficult to contend that a construction contract or a concession would not satisfy these minimal requirements.
To the extent that the investor is able to prove that the host state has indeed breached the treaty standards invoked, it may thus be entitled to restitution or, alternatively, to the reparation of the harm actually suffered.
Second, claimants will seek to direct their claims for damages at a respondent that is likely to be able to satisfy a potential award on damages, and against which enforcement will be possible in the event that the entity does not voluntarily comply with such adverse award. A state will be more likely than a state-conceding-entity to have sufficient resources to satisfy such an award. Likewise, enforcing a monetary award against a state is likely to be easier, given the wide variety and significantly higher number of assets that a state will generally own worldwide, as compared to a state entity. Finally, but not of least importance, arbitral awards rendered under the ICSID Convention are binding on all 163 signatories of the Convention, and enforceable against them, pursuant to Articles 53 to 55 of the Convention.
Third, it may be the case that the contractual dispute resolution mechanism contained in the concession contract is inadequate – either because, as discussed in the first edition of this contribution, the conceding entity may not have had the capacity to enter into an arbitration agreement or because the subject matter of the dispute may be inarbitrable under the applicable law to the concession contract or the laws applicable to the arbitration agreement. That dispute resolution provision might, in some cases, also be pathological – for instance, if it provides for ICSID arbitration, but the potential respondent state entity has not been designated by the state under Article 25 of the ICSID Convention.
Fourth and finally, it may be that, as discussed in the first edition of this contribution, the dispute arises out of actions or omissions of the state, and not of the state entity. In this case, contract-based arbitration against the latter would likely be unavailing in obtaining satisfaction from the former, whereas investment treaty arbitration provides a remedy to stakeholders in the project.
In the circumstances, states may be faced with disputes relating to the effect that measures taken in the exercise of their sovereignty may have on private businesses. Investment treaty arbitration is, in this regard, no stranger to the criticism that it may pose a threat to states’ freedom to regulate, including (and, perhaps, in particular) in situations of crisis.
Investment treaty arbitration – hampering the freedom of states to regulate?
In 2001, Argentina underwent a severe economic crisis, the result of which was the devaluation of the local currency down to 25 per cent of its previous value and a rampant inflation of as much as 41 per cent. At the same time, GDP per capita fell by around 20 per cent, while unemployment increased to 25 per cent of the labour force and poverty levels reached around 55 per cent of the population.
Argentina took a series of measures aimed at containing the crisis, including renouncing the parity between the peso and the American dollar, which had been in place since the enactment of the Convertibility Law in 1991. Through an emergency law enacted in January 2002, Argentina (1) converted into pesos all obligations expressed in foreign currencies; (2) abrogated adjustment clauses denominated in American dollars or other foreign currencies as well as indexation clauses and mechanisms based on the price indexes of foreign countries; and, for private contracts, (3) provided that:
all considerations [would] be paid in Argentine pesos at an exchange rate of one Argentine peso = one US dollar, as payment for the amount to be ultimately agreed upon by the parties, or such amount as might be determined through court proceedings if the parties failed to reach an agreement.
In addition, the emergency law also called for the renegotiation of private and public contracts so as to adapt them to the new foreign exchange system.
In these circumstances, a construction company incorporated in the Federal Republic of Germany, by the name of Hochtief Aktiengesellschaft (Hochtief) commenced arbitration proceedings against Argentina on the basis of the 1991 bilateral investment treaty between Argentina and the Federal Republic of Germany. The dispute arose out of a 25-year concession awarded by the state to a consortium of construction companies (which included Hochtief) for the construction, maintenance and operation of a toll road and several bridges. The consortium incorporated a local company with the purpose of performing the concession contract, in which the consortium members were shareholders. Subsequently, the consortium members assigned all of their rights and obligations under the concession contract to the local company. Hochtief’s interest in the concession was thus indirect, through the local company.
Hochtief claimed that Argentina had breached its obligation under the Germany–Argentina investment treaty to afford it fair and equitable treatment, inter alia by enacting the January 2002 emergency law. According to Hochtief, such law had eliminated the guarantees contained in the concession contract and significantly altered its commercial balance. In other words, Hochtief sought to argue that a disturbance had occurred in the economic equilibrium of its contract, which was attributable to the state and amounted to a breach of its legitimate expectations, and thus of the fair and equitable treatment standard. It claimed some US$ 54 million in compensation.
The tribunal analysed the terms of the concession contract and found that ‘neither the Bidding Terms nor the Concession Contract stipulated that there could be no departure from dollar–peso parity’and thus that ‘no specific promise or undertaking to maintain that parity was explicitly made by Respondent to Claimant.’ However, the tribunal found that ‘the position of the Concessionaire was protected by provisions that in effect tied the Concessionaire’s revenues to US dollars and the US economy.’ There was, in other words, ‘a clear expectation that the commercial balance of the Contract would be maintained by the continuation of peso–dollar parity.’ The concessionaire was thus entitled to the preservation of the commercial balance of the concession contract (put differently, ‘the maintenance of the value, in dollar terms, of the revenues under the Contract’), though the precise means for such preservation were not explicitly defined. The pesification law did not, in and of itself, violate any expectations that the investor could have legitimately held. Argentina’s subsequent failure to restore the claimant to the position in which it would have been absent the law, in terms of the commercial balance of the concession contract, amounted to a breach of the state’s international obligations.
Thus, while Argentina’s regulatory freedom was preserved as a matter of principle,the effects of the changes it made to its regulatory framework in a time of severe crisis was considered to have altered the commercial balance of a contract it had concluded with a foreign investor, to the detriment of the latter. The investor had a legitimate expectation under the treaty with Germany that such balance would be restored through other means, and the state’s failure to act accordingly triggered its international responsibility. As Professors Dolzer and Schreuer advise, ‘the host state must at all times be aware that its legal order forms the basis of legitimate expectations, which must be taken into account in future reforms.’ This may be a tall order of business, especially for states that may be highly dependent on foreign direct investment into key public services. It may be difficult to track all the legitimate expectations of all the investors in all the ongoing concession contracts in a state – all the more so when such legitimate expectations do not even (necessarily) derive from clear contractual clauses to that effect.
As a final comment on Hochtief, we note that the claimant’s situation might have been different if investment treaty arbitration had not been available to it. Though we cannot speculate as to the chances of success of any claims that Hochtief could have brought before local courts or in a contract-based arbitration, we can consider some of the hurdles that such proceedings may have presented. For instance, as a minority shareholder in the consortium and having no direct rights of its own under the concession, Hochtief may not have had standing to commence proceedings against Argentina at all. Alternatively, at least some of its claims could have been inadmissible, given that the concession contract expressly excluded any claims by the lenders or creditors of the concessionaire against the state, arising in connection with loans taken by the concessionaire to fund the project.To the extent that capital injections made by the consortium partners into the concessionaire could be construed to fall under that category, a portion of Hochtief’s claims would have fallen away. Further, the claims would have been governed by the terms of the contract, and by Argentinian law as opposed to international law. Hochtief’s successful claim for breach of fair and equitable treatment would thus have had to be submitted as a pure claim for breach of contract. This would not have been without its difficulties, given that, as the Hochtief tribunal noted, neither the bidding terms nor the contract itself alone gave the investor an unqualified right to parity between the Argentinian peso and the American dollar.
Though not arising from a dire economic crisis, Peru’s recent disputes with at least two foreign investors raise similar questions regarding the state’s freedom to regulate.
In 2014, Peru awarded a concession contract for the construction and operation of a 1100 km-long gas pipeline (the Gasoducto Sur Peruano or ‘GSP’), connecting the southern highlands and the Pacific coast of the country, to a consortium composed of Brazilian construction giant Odebrecht (55 per cent), Spanish Enagas (25 per cent) and Peruvian Graña y Montero (20 per cent). In 2015, Odebrecht became embroiled in a severe corruption scandal originating in Brazil, which eventually spread throughout Latin America.The company admitted to paying hundreds of millions of dollars in kickbacks in order to secure contracts around the continent over a period of 15 years, and came under scrutiny from the authorities. In 2016, Odebrecht reached a plea deal in the United States, as well as agreements to similar effect with the Brazilian and Swiss authorities, agreeing to pay global penalties of some US$3.5 billion.
The scandal breaking out had a severe impact on Odebrecht’s ability to secure financing, and, in light of Odebrecht’s majority stake in the consortium, on the latter’s ability to finance the GSP. The banks funding the GSP reportedly refused to provide further loans to the consortium until Odebrecht sold its stake in the consortium, which the company was unable to achieve in time. Thus, the consortium was, in turn, unable to meet a financing deadline,which led Peru to cancel the concession, and call a US$293 million bank guarantee that Odebrecht had provided. In parallel, with the stated purpose of safeguarding the state’s interest in relation to companies convicted of corruption and ensuring the continuity of public service, Peru enacted Emergency Decree 003 of 13 February 2017. This piece of legislation suspended, inter alia, the transfer of investment-related capital (i.e., returns on investment, proceeds generated by the sale of assets or shares) and dividends abroad, for a duration of one year. The duration of Emergency Decree 003 was subsequently extended for one month, and the decree was ultimately replaced by Law 30.737 of 9 March 2018.
The GSP gave rise to two investment treaty arbitrations, only one of which has been confirmed as ongoing to date. On the one hand, Spanish consortium member Enagas has commenced an ICSID arbitration against Peru, under the Spain-Peru bilateral investment treaty. The claimant argues that Peru has disregarded a clause of the concession contract providing that, in the event of a cancellation, the concession would be auctioned within 12 months, and the proceeds would be contributed towards compensating the investment made by the previous concessionaire.Enagas estimates its investment in the GSP concession to amount to some US$500 million. The details of Enagas’ specific claims against Peru are, to date, unknown, but the claimant is likely to contend that its investment has not been afforded fair and equitable treatment (perhaps by arguing that its legitimate expectations have not been upheld). It may even go as far as claiming that such investment has been, in whole or in part, deprived of its value, in other words, expropriated. The Spain-Peru treaty does not contain an observance of undertakings clause (also known as an umbrella clause), allowing the investor to elevate a claim for breach of contract to the level of a claim for breach of treaty (as we discussed in the previous version of this contribution). However, it remains possible for such a provision to be imported into the treaty by way of a most-favoured nation clause.
On the other hand, two subsidiaries of Odebrecht are reported to have served a notice of dispute on Peru under the Peru-Luxemburg treaty.While the notice itself is not public, it is reported to relate to specific measures taken by the state in the wake of the Odebrecht corruption scandal, including the cancellation of the GSP concession and the enactment of Emergency Decree 003-2017. The claimants are said to argue that the latter would have violated the treaty clause providing for freedom of transfer of the company’s capital, dividends and profits.
The fallout from the Odebrecht scandal in Peru will be worth following in the near future, as other arbitrations may arise out of the measures that the state has taken or is yet to take in this regard. It may also be worth monitoring the continuing criminal investigations in Peru (and elsewhere). For international arbitral tribunals applying international law, such investigations yield matters of fact that may be material to their understanding of the facts of the case before them. Such tribunals would not be bound by the decisions or reasoning of local courts. In contrast, for arbitral tribunals bound to apply domestic law – for instance, in the case of a contract-based arbitration governed by such law – the decisions and reasoning of the domestic courts are matters of law and must be upheld as such.
Seen from the perspective of states, the Odebrecht scandal furthers the concern that investment treaty arbitration may pose an impediment to their freedom to regulate, or, at the very least, may expose them to potentially substantial payments of compensation as a direct consequence of such regulation being found to infringe on the rights of a foreign investor. This ‘financial impact of regulation’ is compounded, in the case of construction and concession projects, by the losses caused by the collapse of these projects (including diminished economic growth, and loss of profits derived from the future operation thereof). However, this concern may be somewhat assuaged by the knowledge that, in principle, at least, the sovereign freedom to regulate is itself uncontested in international arbitration. In this regard, the victory achieved by Uruguay in the arbitration brought against it by tobacco giant Philip Morris is a testament to the wide margin of appreciation of states in adopting measures concerning public health.It seems only reasonable that a similarly wide margin of appreciation would be afforded to a state seeking to ensure the continuity of public service in the face of an international corruption scandal of the magnitude of the one involving Odebrecht. Further, case law recognises that the legitimate expectations of an investor, which may, if infringed, give rise to a cause of action under a treaty, arise not out of the ‘provisions of general legislation applicable to a plurality of persons or a category of persons’, but rather out of the specific commitments undertaken and representations made by a state or an SOE to the investor itself, in order to induce it to make the investment in the first place. Thus, it will be key for states and SOEs to monitor such representations and pay particular attention to the wording of the contractual commitments they undertake, so as to minimise potential future litigation to the extent possible.
From the perspective of investors, equal care is advisable in the pre-investment contacts with the state or state entities as well as the drafting of the contract terms, given that the specific terms of the concession contract may provide the sole (in certain cases) basis for a legitimate expectation claim. In this regard, in the previous edition of our contribution, we emphasised the importance of contractual language for the preservation of the economic equilibrium of the contract. We advised that concessionaires may even consider going one step further, and establishing specific mechanisms under the contract for the restoration of said equilibrium.
It is expected that the percentage of construction- (and concession) related arbitrations with states or state-owned entities will continue to increase in the coming years. This increase will be due, in particular, to the projects of the Belt and Road Initiative. Launched in 2013 by the People’s Republic of China, the programme is estimated to entail between US$1.2 and 1.3 trillionin investments across Asia, Europe, the Middle East and Africa. Investments will target projects for road, rail and pipeline construction (known as the Silk Road Economic Belt), and port and coastal infrastructure projects (known as the 21st Century Maritime Silk Road). The Belt and Road Initiative comprises projects of a scale and complexity that are sure to present complications that, in certain instances, may lead to disputes. Such disputes are likely to test the principle of sovereign regulatory freedom again, and in new ways, particularly if the need for foreign capital in the development of infrastructure and basic public services will be pitted against the protection of the environment or of public health. These will be interesting times for investment treaty arbitration.
 Philip Dunham and José Manuel García Represa are partners at Dechert (Paris) LLP. The authors extend their thanks to Ruxandra Esanu for her assistance with the research leading to this contribution.
 R. Jaidane, ‘La gestion des contrats internationaux de concession’, 3 Revue de droit des affaires internationales 289, 2005, p. 290.
 P. Dunham and J.M. García Represa, ‘Construction Arbitration and Concession Contracts’, Global Arbitration Review –The Guide to Construction Arbitration (2017).
 P. Dunham and J. M. García Represa, ‘Construction Arbitration and Concession Contracts’, Global Arbitration Review – The Guide to Construction Arbitration (2018).
 ICSID, The ICSID Caseload – Statistics , issue 2019-1, available online at https://icsid.worldbank.org/en/Documents/resources/ICSID%20Web%20Stats%202019-1(English).pdf
 The ICSID statistics do not allow for a classification based on the nature of the contract (if any) between the private investor and the state or state-owned entity. Nonetheless, ICSID’s website indicates that eight cases involving concessions in various sectors were registered in 2018 and are currently pending, whereas an additional two have been discontinued. Likewise, six cases were registered in 2017 and are still pending, while two have since concluded. See ‘ICSID Pending Cases’, available at https://icsid.worldbank.org/en/pages/cases/pendingCases.aspx?status=p and ‘ICSID Concluded Cases’, available at https://icsid.worldbank.org/en/Pages/cases/ConcludedCases.aspx?status=c
 The ICC statistics do not allow for a classification based on the nature of the contract (if any) between the private investor and the state or state-owned entity.
 See, for instance, Permanent Court of Arbitration (ed.), Multiple Party Actions in International Arbitration, Oxford University Press (2009).
 World Bank Group, Report on the Recommended PPP Contractual Provisions (2015), available at https://ppp.worldbank.org/public-private-partnership/sites/ppp.worldbank.org/files/ppp_testdumb/documents/150808_wbg_report_on_recommended_ppp_contractual_provisions.pdf
 World Bank Group, Report on the Recommended PPP Contractual Provisions (2015), Section 8.2, available at https://ppp.worldbank.org/public-private-partnership/sites/ppp.worldbank.org/files/ppp_testdumb/documents/150808_wbg_report_on_recommended_ppp_contractual_provisions.pdf
 World Bank Group, Report on the Recommended PPP Contractual Provisions (2015), p.8, available at https://ppp.worldbank.org/public-private-partnership/sites/ppp.worldbank.org/files/ppp_testdumb/documents/150808_wbg_report_on_recommended_ppp_contractual_provisions.pdf
 To date, at least 12 ICSID investment arbitration tribunals have held that such activities constitute an investment. See Jan de Nul NV and Dredging International NV v. Arab Republic of Egypt, ICSID Case No. ARB/04/13, Award of 6 November 2008; Saipem SpA v. Bangladesh, ICSID Case No. ARB/05/07, Decision on Jurisdiction and Recommendation on Provisional Measures dated 21 March 2007; Salini Costruttori S.p.A. and Italstrade S.p.A. v. Kingdom of Morocco, ICSID Case No. ARB/00/4, Decision on Jurisdiction dated 23 July 2001; ADC Affiliate Ltd and ADC & ADMC Management Ltd v. the Republic of Hungary, ICSID Case No. ARB/03/16, Award of 2 October 2006; Beijing Urban Construction Group Co Ltd (BUCG) v. Republic of Yemen, ICSID Case No. ARB/14/30, Decision on Jurisdiction dated 31 May 2017; Malicorp Limited v. The Arab Republic of Egypt, ICSID Case No. ARB08/18, Award of 7 February 2011; Garanti Koza v. Turkmenistan, ICSID Case No. ARB/11/20, Award of 19 December 2016; Toto Costruzioni Generali S.p.A. v. Republic of Lebanon, ICSID Case No. ARB/07/12, Decision on Jurisdiction dated 11 September 2009; Bayindir Insaat Turizm Ticaret Ve Sanayi A. v. Islamic Republic of Pakistan, ICSID Case No. ARB/03/29, Decision on Jurisdiction dated 14 November 2005; Desert Line Projects LLC v. The Republic of Yemen, ICSID Case No. ARB/05/17, Award of 6 February 2008; Pantechniki S.A. v. Albania, ICSID Case No. ARB/07/21, Award of 30 July 2009; Consortium RFCC v. Kingdom of Morocco, ICSID Case No. ARB/00/6, Award of 22 December 2003.
 Orascom TMT Investments S.a.r.l. v. People’s Democratic Republic of Algeria, ICSID Case No. ARB/12/35, Award of 31 May 2017, Paragraph 370. See also Nova Scotia Power Incorporated (Canada) v. Bolivarian Republic of Venezuela, ICSID Case No. ARB(AF)/11/1, Award of 30 April 2014, Paragraph 84; Lundin Tunisia B.V. v. Tunisian Republic, ICSID Case No. ARB/12/30, Award of 22 December 2015, Paragraphs 139-140; Electrabel S.A. v. Hungary, ICSID Case No. ARB/07/19, Decision on Jurisdiction, Applicable Law and Liability of 30 November 2012, Paragraph 5.43; Vestey Group Limited v. Bolivarian Republic of Venezuela, ICSID Case No. ARB/06/4, Award of 15 April 2016, Paragraph 187; Mr. Saba Fakes v. Republic of Turkey, ICSID Case No. ARB/07/20, Award of 14 July 2010, Paragraph 110; AHS Niger and Menzies Middle East and Africa SA v. Republic of Nigeria, ICSID Case No. ARB/11/11, Decision on Jurisdiction of 15 July 2013, Paragraph 210; Quiborax S.A., Non Metallic Minerals S.A. and Allan Fosk Kaplún v. Plurinational State of Bolivia, ICSID Case No. ARB/06/2, Decision on Jurisdiction of 27 September 2012, Paragraph 227.
 ICSID, ICSID Convention, Regulation and Rules (2006), available at https://icsid.worldbank.org/en/Documents/icsiddocs/ICSID%20Convention%20English.pdf
 M. Kiguel, ‘Argentina’s 2001 Economic and Financial Crisis: Lessons for Europe’, in Think Tank 20: Beyond Macroeconomic Policy Coordination Discussions in the G-20, November 2011, available at https://www.brookings.edu/wp-content/uploads/2016/06/11_argentina_kiguel.pdf.
 Hochtief AG v. The Argentine Republic, ICSID Case No. ARB/07/31 (Hochtief v. Argentina), Decision on Liability of 29 December 2014, Paragraph 98.
 id., Paragraphs 236, 239 (‘While there was a clear expectation that the commercial balance of the Contract would be maintained by the continuation of peso–dollar parity, no specific promise or undertaking to maintain that parity was explicitly made by Respondent to Claimant. Neither the Bidding Terms nor the Concession Contract, nor any other instrument presented to the Tribunal, contains any specific and absolute undertaking not in any circumstances to pesify the Contract.’).
 id., Paragraph 236.
 id., Paragraph 239.
 id., Paragraph 238.
 id., Paragraphs 241–242.
 In this connection, the tribunal in Parkerings v. Lithuania explicitly emphasised ‘each State’s undeniable right and privilege to exercise its sovereign legislative power.’ See Parkerings-Compagniet AS v. Republic of Lithuania, ICSID Case No. ARB/05/8 (Parkerings v. Lithuania), Award of 11 September 2007, Paragraph 332.
 R. Dolzer and C. Schreuer, Principles of International Investment Law, Oxford University Press (2008), p. 135.
 Hochtief v. Argentina, id., Paragraph 188.
 See, for instance, France24, ‘After Brazil, Odebrecht corruption scandal spreads to Peru’, press report of 24 June 2019; Bonds & Loans, ‘Peru’s Infrastructure: Life after Odebrecht’, press article of 21 April 2017.
 See, for instance, United States Department of Justice, ‘Odebrecht and Braskem Plead Guilty and Agree to Pay at Least $3.5 Billion in Global Penalties to Resolve Largest Foreign Bribery Case in History’, press release of 27 December 2016.
 See, for instance, LatinFinance, ‘Peru cancels Odebrecht pipeline contract’, press article of 23 January 2017.
 Global Arbitration Review, ‘Peru faces new claim over pipeline project in wake of Odebrecht scandal’, press article of 5 July 2018, available at https://globalarbitrationreview.com/article/1171447/peru-faces-new-claim-over-pipeline-project-in-wake-of-odebrecht-scandal
 Emergency Decree 003-2017 of 13 February 2017, available at https://busquedas.elperuano.pe/download/url/decreto-de-urgencia-que-asegura-la-continuidad-de-proyectos-decreto-de-urgencia-n-003-2017-1485019-1
 IA Reporter, ‘Another investor files notice of BIT claim in further fallout from Odebrecht scandal’, press article of 20 December 2017, available at https://www.iareporter.com/articles/another-investor-files-notice-of-bit-claim-in-further-fallout-from-odebrecht-scandal/; Global Arbitration Review, ‘Peru faces new claim over pipeline project in wake of Odebrecht scandal’, press article of 5 July 2018, available at https://globalarbitrationreview.com/article/1171447/peru-faces-new-claim-over-pipeline-project-in-wake-of-odebrecht-scandal
 See, for instance, EDF International SA, Saur International SA and Leon Participaciones Argentinas SA v. Republic of Argentina, ICSID Case No. ARB/03/23, Award of 11 June 2012; Franck Charles Arif v. Republic of Moldova, ICSID Case No. ARB/11/23, Award of 8 April 2013.
 IA Reporter, ‘Corruption-engulfed Brazilian contractor puts Peru on notice of a breach of Peru-Luxembourg investment treaty’, press article of 9 August 2017, available at https://www.iareporter.com/articles/corruption-engulfed-brazilian-contractor-puts-peru-on-notice-of-a-breach-of-peru-luxembourg-bit/
 Philip Morris Brands Sàrl, Philip Morris Products S.A. and Abal Hermanos S.A. v. Oriental Republic of Uruguay, ICSID Case No. ARB/10/7, Award of 8 July 2016. The arbitration arose out of the anti-tobacco legislation enacted by Uruguay, and was mirrored by a similar arbitration against Australia. The latter, however, was dismissed at the jurisdictional stage. See Philip Morris Asia Limited v. The Commonwealth of Australia, UNCITRAL, PCA Case No. 2012-12, Award on Jurisdiction and Admissibility of 17 December 2015.
 Philip Morris Brands Sàrl, Philip Morris Products S.A. and Abal Hermanos S.A. v. Oriental Republic of Uruguay, ICSID Case No. ARB/10/7, Award of 8 July 2016, Paragraph 426.
 Morgan Stanley, ‘Inside China’s plan to create a modern silk road’, research note of 14 March 2018, available at https://www.morganstanley.com/ideas/china-belt-and-road