Continental Casualty and Argentina will continue to battle over financial investments

By Elizabeth Whitsitt

December 6, 2009

On October 23, 2009 an ad hoc committee, composed of Gavan Griffith Q.C., Judge Bloa A. Ajibola and Mr. Christer Söderlund, ruled that it will hear the annulment applications of the Argentine Republic and Continental Casualty Company.  According to the ad hoc committee those proceedings will take place without requiring Argentina to post financial security into an escrow or trust account.

One of many disputes arising as a result of Argentina’s response to an economic depression that took hold of the country in 2001-2002, this case concerned Continental Casualty’s investment in an Argentine insurance company, CNA ART (CNA).  CNA saw its low-risk assets, such as cash accounts, treasury bills and government bonds, plummet in value as Argentina converted financial instruments originally valued in US dollars into pesos and asset transfers out of Argentina were restricted.

On September 5, 2008 an ICSID tribunal awarded Continental Casualty US $2.8 million, only a small portion of the US $46 million that the firm had claimed against Argentina.

Earlier this year, Continental Casualty moved to annul that award arguing that the tribunal had “manifestly exceeded its powers” and that the award “failed to state the reasons upon which it [was] based.”  Six months later, on June 5, 2009 Argentina made its own bid for partial annulment of the tribunal’s award.

At a preliminary procedural consultation meeting between the parties this summer, Continental Casualty objected to Argentina’s annulment application.  Specifically, the Illinois-based firm argued that Argentina’s annulment application was filed more than 120 days after the tribunal’s award was rendered.  Meanwhile, Argentina asserted that the time limit for submitting an annulment application had been extended by virtue of the tribunal’s decision on February 23, 2009 rectifying its original award in the case.

After finding that Argentina’s annulment bid was filed within the time limits stipulated by Articles 49(2) and 51(2) of the ICSID Convention, the ad hoc committee rejected arguments by Continental Casualty that favoured the establishment of separate time limits for different categories of annulment applications (i.e. those applications relating to an original award versus those relating to matters affected by a rectification decision).  Relying on the clear language of Article 49(2), the ad hoc committee confirmed that “…where a rectification decision is given…the period of time provided for under Article 52(2) of the ICSID Convention runs from the date of the rectification decision, rather than from the date of the original award.”

In a separate decision, the ad hoc committee determined that enforcement of the tribunal’s US $2.8 million award would be deferred until the conclusion of the annulment proceedings.  The ad hoc committee’s ruling is notable for the fact that it does not oblige Argentina to post security.  In making its decision, the ad hoc committee accepted Continental Casualty’s concern that Argentina might not comply with its obligations to pay the award (pending the outcome of the annulment proceedings).  However, the ad hoc committee distinguished this dispute from other annulment proceedings which have insisted that Argentina is wrong to require award creditors to commence enforcement procedures in Argentine courts before collecting payment.*  Specifically, the committee viewed the relatively small amount of the award and the cross applications for annulment in this case as determinative of the issue and concluded that “…practical considerations may allow a continued stay of the enforcement of the Award pending the conclusion of the annulment proceedings without imposing any condition of security.”

* See “Argentina ordered to reconsider its position on payment of ICSID awards,” By Damon Vis-Dunbar, Investment Treaty News, 14 October 2008, available here:


Decision on the Claimant’s Preliminary Objection to Argentina’s application for annulment in Continental Casualty Company v. Argentine is available here:

Decision on Argentina’s application for a stay of enforcement of the award in Continental Casualty Company v. Argentina is available here:

Previous ITN Reporting

“Continental Casualty Company v. the Argentine Republic: Argentina emerges largely victorious in dispute related to country’s financial crisis,” By Damon Vis-Dunbar, Investment Treaty News, 10 September 2008, available here:

“Continental Casualty Company moves to annul award favourable to Argentina,” By Damon Vis-Dunbar, Investment Treaty News, 16 January 2008, available here: