An ICSID tribunal has rejected all but one of the claims made by Continental Casualty Company (Continental) against Argentina, largely on the basis that the measures taken by Argentina were justified by "necessity".

Continental, a US investor, held a number of assets which were denominated largely in pesos, and fully convertible to US dollars. It alleged that various measures taken during the Argentinian economic crisis in 2001-2002 destroyed the legal security of those assets and prevented it from hedging against the risk of devaluation of the peso. Argentina successfully argued that it was entitled to rely on the defence of necessity in the US-Argentina BIT, except in relation to certain treasury bills. The tribunal concluded that Argentina's conduct, in the face of economic and social crisis, conformed "by and large" with the conditions for derogating from its obligations under the BIT.

The case is interesting in light of the divergent views on the necessity defence expressed CMS v Argentina and LG&E v Argentina (in the latter, certain measures were found to be justified by the severe economic crisis). The tribunal in this case also indicated the factors that may be relevant in evaluating a breach of the obligation to accord fair and equitable treatment. In particular, general legislative statements by a state directed at a wider range of investors (particularly competent, major international investors involved in high political risk scenarios) would engender a reduced expectation of stability on the part of the investor.