Update: Reforms To Argentina's Arbitration System

It has been widely recognised that since the 2001 economic crisis, Argentina has generally struggled to reach its full potential economically. Under the successive Kirchner administrations, the country took an increasingly closed and nationalist approach towards foreign policy. Argentina is widely seen as one of the countries with the most untapped economic potential worldwide. Since his election in late 2015, President Mauricio Macri has been working to change this, with a steady stream of economic, political and legal reforms seeking to improve Argentina's business atmosphere and in turn stimulate long-term private investment and foreign interest within the market, with the aim of ultimately moving beyond the economic issues that have remained persistent challenges over recent years.

It has certainly not been an easy path for Macri's coalition, Cambiemos (literally translated, the party name means 'Let's Change'). Macri has made frequent reference to his administration's 'heavy inheritance', as they deal with an economy coming out of a recession as well as the ill effects of soaring inflation and over-spending by the previous government. While progress towards change has been slower than some would have liked, investors have shown a strong and clear preference for Macri's positions and ideologies. However, many observers are waiting for further signs that efforts towards reform will continue.

This post will discuss some of the changes being made to the legal system—in particular, the current system of arbitration. As it stands, Argentina's arbitration system stands as one of the biggest negative detractors to foreign investment. Argentina's arbitration legal framework is a clunky relic, with a disintegrated system lacking a unifying arbitration statute, either domestically or internationally. There are currently two different federal statutes regulating arbitration, and in turn, the majority of the 23 provinces each have their own provisions outlaying separate arbitration practices. To make matters even more confusing, a number of inconsistencies and contradictions have become evident which only compound the existing difficulties.

Big steps are already being made to resolve these issues. On 7 September 2017, the Argentine Senate voted 43-1 strongly in favour of adopting the International Commercial Law bill, which in turn is strongly based on the United Nations Commission on International Trade Law's...