Publications

This week, in BG Group PLC v. Republic of Argentina, the Supreme Court confronted the question of “who”—a court or an arbitrator—should primarily interpret and apply the requirement that a party submit a dispute to a court for a certain period of time before referring that dispute to arbitration. The case is significant because it represents the first time that the Court has decided this issue in the context of an investor-State arbitration under a bilateral investment treaty between States—one of thousands of such treaties entered into in recent decades, which seek to promote foreign direct investment by conferring protections on investments and providing for arbitration of claims brought by investors of one State against the other State. In a 7-2 opinion, the Court determined that its previous decisions on “who” should decide this question, which were rendered in the context of ordinary commercial contracts, should apply with equal force to a dispute arising out of a bilateral investment treaty containing an arbitration provision between the United Kingdom and Argentina. In reaching this conclusion, the majority decided that treaties and contracts do not require different treatment because “a treaty is a contract, though between two nations.” Applying the presumptions used when interpreting threshold provisions concerning arbitration in ordinary contracts, the majority concluded that the arbitrators properly decided the threshold issue themselves.