The two cases of Abaclat and others v. Argentina Republic and Ambiente Ufficio S.p.A. and others v. Argentine Republic have attracted much attention in the application of international investment arbitrationin sovereign debt restructuring. However, the relationship between the international investment law and the sovereign debt restructuring is complex and controversial, since the widespread investment arbitration may hinder the process of sovereign debt restructuring. It may even eradicate its role in the sovereign debt issues under the international investment law framework.To avoid such problems, international investment arbitration under BITs should be applied to sovereign debt restructuring in a more restrictive manner.
Source: Contemporary Asia Arbitration Journal Vol. 7, No. 1, pp. 229-250, May 2014, by Kai-wei Chan, National Taiwan University, College of Law.