On Monday, the United States Supreme Court agreed to hear BG Group PLC v. Republic of Argentina, No. 12-138. In the case, the Republic of Argentina argued an arbitrator exceeded his authority by ignoring the terms of a bilateral investment treaty between the nation and the United Kingdom. The treaty provides that arbitration may take place only if a dispute is not resolved within 18 months of a filing in the host nation’s courts. Argentina alleged that “BG Group, PLC, a British corporation and investor in Argentina gas companies pursuant to the Treaty, invoked the arbitration clause without first filing a claim in the Argentine courts.”
According to the high court, the question presented in the case is:
In disputes involving a multi-staged dispute resolution process, does a court or instead the arbitrator determine whether a precondition to arbitration has been satisfied?
The case is on appeal from the District of Columbia Circuit and will be heard by the Supreme Court this fall despite that the U.S. Solicitor General advised against granting certiorari. This is the first time the high court has agreed to consider an arbitration award that arose out of an investment treaty.
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