Compañía de Aguas del Aconquija SA &Vivendi Universal SA v. Argentine Republic

investment law, which is to accelerate the movement of private funds into developing
countries for development purposes, will be frustrated. (Para. 396)^^
This solution retains a government’s flexibility to respond to a crisis but requires it to compensate investors for any damages suffered due to the necessary measures.
Another option is to enable arbitral tribunals to review decisions of a state regarding what measures are necessary to protect its essential interests and what these essential interests might be, using standards of good faith, proportionality, or a margin of appreciation.^^ In practice, this approach would probably shift the cost of measures onto investors, as the standards of review involve minimal scrutiny. In the long term, this solution would lead to higher costs of capital for all countries and lower aggregate levels of foreign investment