BG v. Argentina (US Supreme Court)

 BG v. Argentina (US Supreme Court)  In a 7-2 majority opinion, the US Supreme Court (Breyer J. giving leading opinion) held that the appeal court in Washington, D.C., erred when it set aside the UNCITRAL award.  Breyer J. held that the precondition to litigate before local courts in the UK-Argentina BIT was akin to a "claims-processing rules" and not a condition of Argentina's consent to arbitrate.  The Court also held that nothing in the BIT overcame the "ordinary presumption" in US law that arbitrators rather than the courts decide disputes over the meaning and application of procedural preconditions to arbitration and that the fact that the instrument is a treaty rather than a contract did not make a critical difference.  See GAR report.

The Court therefore found that the arbitral tribunal was within its authority in ruling that (a) the local litigation provision was not an absolute bar to arbitration and (b) that Argentina had enacted laws that hindered access to the court system. While the Court did not necessarily agree with the tribunal’s finding that, under the circumstances in Argentina at the time, it would be “absurd and unreasonable” to require the parties to adhere to the local litigation requirement, such a finding was not, however, barred by the treaty, or arrived at by straying from the interpretation and application of the agreement, and was therefore lawful.

See also: http://www.cpradr.org/About/NewsandArticles/tabid/265/ID/850/BG-Group-v-Argentina-CPR-Reviews-US-Supreme-Court-Decision.aspx