By Fritz Kainz^[1]

Introduction

A jurisdictional decision in CIT Group v. Argentina rendered by an ICSID Tribunal in 2007, which IAReporter recently published, contains a potentially drastic increase in the doctrine of indispensable parties before investment tribunals (the decision can be accessed in English and Spanish here). While the Tribunal rejected Argentina’s jurisdictional objection based on the facts, it found that, in principle, under Article 25 of the ICSID Convention, it “could not declare itself competent if it had of necessity to evaluate the conduct of” private parties which are neither the investor nor a Contracting State. Previous commentary on the decision has noted the Tribunal’s skeptical attitude towards the general applicability of the Monetary Gold principle beyond the statutory framework of the ICJ (see the recent IAReporter note here). However, by framing the indispensable party doctrine as a jurisdictional obstacle based on Article 25 of the ICSID Convention which also covers private parties, the Tribunal espoused an autonomous indispensable party doctrine whose scope transcends anything found in the jurisprudence of the ICJ or other international courts or tribunals.

Indispensable Parties at the ICJ: The Monetary Gold Principle

Indispensable parties are actors whose legal interests are central to a dispute before them, but which have not consented to the proceedings. International courts and tribunals have long grappled with whether this creates procedural obstacles relating to jurisdiction or admissibility. The International Court of Justice (ICJ) has espoused a form of the indispensable party principle since the 1954 Monetary Gold judgment, wherein it ruled that it cannot exercise jurisdiction over a case in which the “vital issue to be settled concerns the international responsibility of a third State.” The Court has since held that it requires the determination of the absent third state’s responsibility as a logical prerequisite (Certain Phosphate Lands in Nauru, para. 55; East Timor, para. 35). Likewise, it has clarified that a valid objection based on the Monetary Gold doctrine does not deprive the Court of its jurisdiction, but rather prevents its exercise (Arbitral Award, para. 63). Some scholars have traced the formal source of Monetary Gold to the ICJ’s Statute (see, e.g., Thienel (2014)) and others base it on a general rule of international law (see, e.g., Pomson (2019)). Relatedly, the question of whether Monetary Gold applies at other international courts and tribunals, and especially before arbitral tribunals, is disputed (compare the contrasting positions, e.g., by Lang & Tietje (2021), Brouwer (2024), Bonafé (2018), and Zamir (2017)).

Indispensable Parties in Investor-State Arbitration

For the most part, investment tribunals have been cautious to rule whether the ICJ’s Monetary Gold jurisprudence (or, for that matter, whether any indispensable party principle applies) applies to them. Many have distinguished the facts to hold that Monetary Gold would not apply in any case, but without taking an explicit stance on its applicability (see for a recent survey Dhasmana & Sethi (2026)).

The only public decision by any mixed arbitral Tribunal that has applied the Monetary Gold principle to hold a case inadmissible was the 2001 Award in Larsen v. Hawaiian Kingdom, a PCA arbitration applying UNCITRAL rules. The factual and procedural peculiarities of that case, starting with the fact that the very existence of the respondent state and government were highly questionable, likely limit its persuasive value (for fuller analyses see Dumberry (2002), Bederman & Hilbert (2001), and Kainz (2023)).

In investor-state arbitration, no tribunal has yet rejected a case based on indispensable parties in any public decision. Most tribunals have been cautious in taking a stance on whether the principle would apply to their procedural framework. Both in Chevron v. Ecuador in 2012 and Niko Resources v. Bangladesh in 2013, the tribunals refrained from ruling that an indispensable party principle applied, while finding that in any event it would not apply to the facts of the respective cases.

In a 2020 jurisdictional decision in Raiffeisen Bank International v. Croatia, an ICSID Tribunal likewise rejected the Monetary Gold principle on the facts while remaining agnostic as to its applicability. In this case, Croatia had argued that assuming jurisdiction under the Austria-Croatia BIT would result in Austria “incurring responsibility under the EU acquis”, which would place its legal interests before the Tribunal in a way inconsistent with Monetary Gold (paras. 288-89). The Tribunal did not address the Claimant’s argument that Monetary Gold did not apply to investment arbitration, but found that it was “not engaged” because it did not have to rule on Austria’s responsibility under the EU acquis as a prerequisite to ruling on its own jurisdiction (paras. 294-95). That same year, another ICSID Tribunal took a similar approach in Addiko Bank v. Croatia.

In the 2023 Award in DTEK v. Russia, a tribunal constituted under PCA auspices likewise remained neutral towards the Monetary Gold doctrine, but rejected its application on the facts, holding that the case did “not affect a ‘vital issue’ concerning ‘the international responsibility’ of Ukraine”, which was an alleged indispensable party based on the sovereignty dispute over Crimea (para. 224). In an unpublished 2024 Award on Jurisdiction in Ukrenergo v. Russia, a tribunal operating under UNCITRAL rules seems to have taken a similar position (for a summary see Brouwer (2024)).

In the 2023 Award in Pildegovics and SIA North Star v. Norway, the Tribunal found that as far as the claim concerned the respondent conspiring with or inciting Russia to harm the claimant’s investment, Monetary Gold would be applied because it would require the Tribunal to find whether Russia had violated international law (paras. 297-98 & 485). However, instead of rejecting the relevant claims the Tribunal simply limited its analysis to factual findings regarding the Russian Federation’s conduct (paras. 300 & 484-95). In May 2024, the claimants filed an annulment request, claiming, among others, that the application of the Monetary Gold doctrine manifestly exceeded the Tribunal’s powers and caused a denial of justice for the claimants (see here, paras. 44-50).

CIT Group v. Argentina

CIT Group v. Argentina belongs to a cluster of investment arbitration cases which arose out of the Argentine financial crisis of the early 2000s and Argentina’s economic response measures. One of these measures, the so-called “pesification”, prescribed that all debts denominated in dollars had to be converted to pesos based on a one-to-one rate. CIT Group Inc., a Delaware company, claimed that pesification and accompanying measures interfered with contracts between its Argentine subsidiary CCA and private lessees, thus causing losses to CCA (see the IAReporter on CIT v. Argentina here; for background on the crisis and response measures, see, e.g., Reinisch & Tropper (2023)). In December 2003, CIT Group filed a request for arbitration based on the Argentina-U.S. BIT and the ICSID Convention. Argentina filed several jurisdictional objections, including one based on the Monetary Gold doctrine, which it styled a “principle of general international law” (CIT Group v. Argentina, para. 35). It argued that the Tribunal lacked jurisdiction over issues related to the lease contracts because to decide them, “the Tribunal would necessarily have to evaluate the conduct of the private persons who entered into contracts with CCA . . . ” (para. 36).

In an April 2007 decision, the Tribunal, composed of Pierre-Marie Dupuy, Christian Tomuschat, and Claus von Wobeser, rejected Argentina’s jurisdictional objections and ordered the continuation of the proceedings. It stressed that the ICJ had itself noted the statutory character of the Monetary Gold doctrine (para. 40) and found that to be applicable outside of that framework, it would have to be a rule of general international law, whose existence Argentina had not demonstrated (para. 41). The Tribunal found that rather than any general rule, Article 25 of the ICSID Convention limited its jurisdiction ratione materiae to disputes between a contracting state and a national of another contracting state. Given this jurisdictional limitation, it “could not declare itself competent if it had of necessity to evaluate the conduct of CCA’s private customers in order to rule on a dispute related to the leasing business or with respect to alleged damage to CIT’s investment derived from acts of the Argentine State” (para. 42). However, the dispute required the Tribunal solely to evaluate acts of the Argentine government, and it could not “be considered that the leasing contracts are the subject of the dispute and, therefore, the Tribunal will not have to review them . . . “ (para. 42). Consequently, this jurisdictional obstacle did not apply and the Tribunal rejected this jurisdictional objection (as well as Argentina’s other objections). Despite this procedural victory, CIT Group discontinued proceedings in 2009 (see here).

Assessment: An Autonomous Indispensable Party Principle

As noted by other commentators, the decision shows a skeptical attitude towards the general applicability of the Monetary Gold doctrine beyond the ICJ’s statutory framework (see the IAReporter on CIT v. Argentina here). This is in itself noteworthy as most other decisions have remained ambiguous as to this issue, and instead focused on the specific facts to reject the objection.

However, on second view the decision holds more significance than that. The Tribunal applied an indispensable party principle autonomously based on the ICSID Convention. The defining feature of an indispensable party principle is that despite having jurisdiction over the formal parties in the case, the court’s lack of jurisdiction over a third party which is materially involved in the dispute prevents a decision. By holding that Article 25 of the ICSID Convention would bar its competence where it had “of necessity” to evaluate the conduct of third parties, the Tribunal espoused an interpretation of its jurisdictional basis that functionally amounts to an indispensable party principle.

Moreover, because the Tribunal framed this interpretation as essentially autonomous of Monetary Gold and based on the particular jurisdictional basis of the ICSID Convention, its version of the indispensable party principle to some extent follows its own distinct rules. First, it is squarely formulated as a matter of “competence”, i.e., jurisdiction. By contrast, as shown above, the ICJ has now recognized that Monetary Gold pertains not to jurisdiction, but to its exercise. Second, and more fundamentally, the decision seems to include any kind of party which is neither the investor nor another Contracting State, thereby also covering private entities as potential indispensable parties. There can be little doubt that the Tribunal wanted to include them since the purported indispensable parties in CIT Group v. Argentina were the private customers of CCA and the Tribunal dismissed the objection on the facts solely because their legal interests were not at issue (para. 42). This inclusion of private parties materially enhances the personal scope of the indispensable party principle beyond anything recognized by any other international court or tribunal.

However, there are also ways in which the decision aligns with the ICJ’s Monetary Gold jurisprudence. The Tribunal understood Article 25 of the ICSID Convention to bar its competence “if it had of necessity to evaluate the conduct of CCA’s private customers in order to rule on a dispute” validly before it. It found that reviewing CCA’s contracts with its customers would have constituted such an evaluation, which clearly indicates that it considered the legal evaluation of a third party’s conduct to trigger the jurisdictional obstacle. However, this would only apply where determining the dispute before the Tribunal “of necessity” required such an evaluation. This conception of the material requirements for indispensable parties is strikingly similar to the logical prerequisite approach which the ICJ has taken since Nauru. In this way, the Tribunal avoided fragmentation of the material standard despite basing its indispensable party doctrine on a different legal source and expanding its personal scope.

Doctrinally and normatively, the Tribunal’s arguments are not convincing. First, framing the indispensable party principle as a jurisdictional issue causes doctrinal difficulties. This classification bumps up against the fact that under Article 53 of the ICSID Convention, Awards are only binding on the parties in the first place. In the ICJ context, where Article 59 of the Statute prescribes a similar rule, scholars have argued that Monetary Gold is not about the direct effects of any judgment on the absent party, but rather about protecting state consent (and the court’s integrity as a judicial organ) against indirect effects through pronouncements on their legal interests, even when they are not binding on them (see, e.g., Stendel & Wentker (2025)). This is consistent with the ICJ not treating Monetary Gold as an obstacle to jurisdiction itself, but to the exercise thereof. In light of this, the Tribunal’s competence-based rationale which bases its version of the indispensable party principle solely on Article 25 of the ICSID Convention does not fully capture the complexity of the issue.

Second, an autonomous indispensable party doctrine in ICSID arbitrations faces the same criticism as Monetary Gold, namely that it interferes with the dispute settlement body’s obligation to decide cases of which it is otherwise validly seized (see Mollengarden & Zamir (2020)). The Tribunal’s extension of the indispensable party doctrine to also cover private parties exacerbates this critique. Extending the personal scope of the indispensable party doctrine to non-sovereign, private entities cannot rely on the consent-based rationale in the same way as the Monetary Gold doctrine. The jurisdiction over sovereign and private entities rests on entirely different bases. The requirement of state consent to the jurisdiction of (domestic and international) courts is a cornerstone of public international law. The Monetary Gold doctrine is premised on the assumption that the penumbra of the consent requirement is strong enough to bar even nonbinding pronouncements on states’ legal interests under certain circumstances. By contrast, states regularly exercise jurisdiction over private entities and may delegate this competence to an international court or tribunal without the consent of the private entities involved. As a result, even where a tribunal would hypothetically find that Article 25 of the ICSID Convention empowered it to render decisions binding on private third parties, this would “merely” amount to an excess of competence delegated to it and likely raise concerns about the right to be heard. However, it would not implicate the consent principle as such. Therefore, a fortiori, consent by itself cannot exclude the kind of non-binding preliminary pronouncements which are at issue in indispensable party-type cases.

In addition, extending the personal scope of indispensable parties restricts the number of cases in which tribunals may render a decision, thus limiting the potential ambit of their dispute settlement function even more than the Monetary Gold doctrine. As a result, compared to the Monetary Gold doctrine, the indispensable party principle espoused by the Tribunal in CIT v. Argentina can rely on less potent reasons in its favor and must face more stringent objections.

Outlook

It remains to be seen whether the publication of this decision will influence other arbitral tribunals constituted under the ICSID Convention. While almost two decades have passed since the decision was rendered, it represents the views of a distinguished panel of arbitrators on a subject on which most other tribunals have not expressed clear views. As such, it will likely have some argumentative impact. However, more interesting than whether it will have an impact is what its effect would be. As shown above, the decision deviates from the others that have been rendered in the meantime in two, partially conflicting, ways. First, CIT Group v. Argentina is more skeptical of the applicability of the Monetary Gold doctrine to investor-state arbitration than many of the decisions summarized above. Second, its conception of an autonomous indispensable party doctrine based on Article 25 of the ICSID Convention constitutes a “fresh” approach that could introduce Monetary Gold through the backdoor. Because of this dual thrust, the decision might provide fresh argumentative material for both sides in the pending annulment proceedings in Pildegovics. However, for the reasons laid out above, other tribunals will hopefully not adopt the autonomous indispensable party doctrine.

[1] Fritz Kainz is a PhD candidate at the University of Vienna, where his research focuses on the concept of indispensable parties before different international courts and tribunals.