Balance: Autonomy or Precedent in Treaty-based Arbitration? (original) (raw)
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Investment arbitration can contribute to the promotion of the international rule of law through a wider use of legal norms in the international society and through the protection of private persons’ rights. However, as shown by the European Union’s approach in this field, investment arbitration can only be a useful complement to the rule of law within the State if it is reformed to incorporate some elements of permanent courts. Firstly, legal certainty requires clearer and more predictable case-law, which would be eased by an appeal system based on a permanent body. Secondly, procedural fairness needs to be increased, especially through new appointment methods. Thirdly, several mechanisms can foster transparency.
The Doctrine of Precendent in International Arbitration
In its strict sense, International Arbitration does not recognize a de jure doctrine of precedent. However several investment tribunals tend to be influenced, guided and informally follow “precedents” set by earlier international tribunals with regard to the interpretation of some, often vague, general investment standards, like; Fair and Equitable Treatment (FET), Most Favored Nation (MFN), Full Protection and Security and/ or the non-discrimination standards usually contained in BIT(s). This work looks at the Doctrine of Precedent and its applicability in International Arbitration. It assesses whether there is a need to create this doctrine in the arena of International Arbitration. Accordingly, it defines the term doctrine of precedent, examines its relationship with International Arbitration and notes that in its absence, international investment tribunals face a surmountable challenge of inconsistency and unpredictability in the decision making process. In no uncertain words, it concludes by underlining the ever increasing need of adopting precedent as a cornerstone of international arbitral awards/decisions. Since International Arbitration and International Investment & Commercial Arbitration are all part of International law, they may and/or will be applied inter-changeably in this work.
Nnamdi Azikiwe University Journal of International Law and Jurisprudence, 2017
This paper analyses the mechanism for settlement of investment dispute in International Arbitration. The paper adopts doctrinal and analytical approach to legal research. The study examines the provisions of the International Centre for Settlement of Investment Dispute (ICSID) being the most recognised platform for settlement of investment dispute. However, references were made to similar institutions for comparison. The study reveals that Investment Treaties-either multi or bilateral treaty (BITs) are entered into to provide avenue for settlement of investment dispute that may arise between states or their nationals to the treaty. The paper argues that certain provisions of ICSID and other institutional mechanisms for settlement of investment dispute contain compulsory arbitration thereby negating the concepts of consent and party autonomy which are salient elements of international arbitration. The paper concludes with recommendations that the offending provisions of ICSID should be reformed in tandem with jurisprudence of arbitration proceedings.
The study examines arbitrator behaviour in the unique context of investment treaty arbitration. It employs the method of content analysis to test hypotheses of systemic bias in the resolution of jurisdictional issues in investment treaty law. Unlike earlier studies, the study examines trends in legal interpretation instead of case outcomes and fi nds statistically signifi cant evidence that arbitrators favour: (1) the position of claimants over respondent states and (2) the position of claimants from major Western capital-exporting states over claimants from other states. There is a range of possible explanations for the results and further inferences are required to connect the observed trends to rationales for systemic bias. The key fi nding is that the observed trends exist and that they are unlikely to be explained by chance. This gives tentative empirical evidence of cause for concern about the use of arbitration in this context. Cette étude se penche sur le comportement de l'arbitre dans le contexte particulier de l'arbitrage des traités d'investissement. Elle recourt à la méthode de l'analyse du contenu afi n de vérifi er les hypothèses du biais systémique dans la résolution des questions de compétence judiciaire à l'égard du droit des traités d'investissement. Contrairement aux études antérieures, cette étude examine les tendances en matière d'interprétation juridique plutôt que l'issue des procédures et démontre de manière statistiquement signifi cative que les arbitres favorisent : (1) la position des États requérants par rapport à celle des États intimés, et (2) la position des requérants des principaux États exportateurs de capital de l'Ouest rapport à celle des requérants d'autres États. Il existe une vaste gamme d'explications plausibles pour les résultats et d'autres inférences sont nécessaires afin de pourvoir relier les tendances observées aux justifi cations du biais systémique. La principale conclusion est que les tendances observées existent et qu'il est fort peu probable qu'elles soient le fruit du
Zeitschrift für europarechtliche Studien, 2021
In recent years, the current Investor-State Dispute Settlement (ISDS) system has been a subject of reform discussions triggered by several factors, amongst which includes the lack of consistency in ISDS decisions commonly rendered by arbitration tribunals. This undesirable fact places the current ISDS system in conflict with essential rule of law values such as stability, reliability, predictability, and equality - which inevitably diminish the legitimacy of the current system. Undeniably, the un-uniform investment treaties underlying ISDS decisions is a valid justification for divergent outcomes, however, the recognition that a majority of investment treaties share similar if not identical legal standards also makes the argument for consistent ISDS decisions legitimate and in fact necessary to foster the harmonious development of investment law across the network of identical treaty standards. To this end, the use of “precedent” is critical in achieving the aforesaid goal. Notably,...
This article represents the first comprehensive analysis of the challenges to the independence and impartiality of international arbitrators in investment disputes. This article evaluates the rules that govern such challenges and asserts that the standards for challenging ICSID arbitrators are not adequate to enable real challenges to arbitrators. Indeed, only one challenge under the ICSID rules has been successful. This in itself is not necessarily problematic assuming the parties agree to dispute settlement with this in mind. This article proposes adjustment of these standards in a variety of ways to help ensure the fairness and perceived fairness of the arbitral process. Finally, this article calls for states and the arbitration community to take steps to combat conflicts of interest of international arbitrators in order to maintain the legitimacy of the regime and to continue to promote growth of the global economy.
Who Decides Who Decides in International Investment Arbitration
University of Pennsylvania Journal of International Law, 2013
The past twenty years have witnessed a dramatic rise in international adjudication, and especially in international investment arbitration. As international investment arbitration has become more prominent and pervasive, one of its fundamental tenets has come under fire: the practice of having the parties themselves nominate one or more of the arbitrators. Critics contend that party-appointed arbitrators are inherently biased and thus propose eliminating party-appointments altogether. In this article, I argue that moving away from party-appointed arbitrators is unwarranted and unwise, and would too radically transform international investment arbitration. Instead, I propose a simpler solution: adopting stricter arbitrator challenge rules and enlarging the pool of arbitrators. There is no need to gut the arbitration selection system to fix it. Instead, the solution lies in improving the process of deciding who decides the world's international investment disputes.
International investment protection instruments, the most ubiquitous of which is the bilateral investment treaty (BIT), systematically provide for the right of a foreign investor to claim directly against a host state for violations of treaty protections. Investors have been granted the right to bring claims to an arbitral tribunal constituted under one of various sets of international arbitration rules that are strongly inspired by commercial arbitration rules, such as the International Centre for the Settlement of Investment Disputes (ICSID) Rules and the ICSID Additional Facility Rules. Other sets of rules mentioned in investment protection instruments were designed for commercial arbitration and were simply enrolled, without much ado, in the resolution of investment disputes. Adressing institutionalization, precedent setting, transparency and legitimacy, this book chapter looks at some of the most difficult issues raised by the import of the commercial arbitration model into the...
Investment Treaty Arbitration and the Rule of Law: Tensions and Solutions
CETA's Investment Chapter, 2021
Given that the legitimacy crisis against investment arbitration is essentially a Rule of Law crisis, the aim of this chapter is to highlight the substantive and procedural components of the Rule of Law in the context of investment arbitration. To that end, the first part of this chapter will provide a brief overview of the historical origins of the Rule of Law. In the second part, both the procedural and the substantive aspects of the Rule of Law will be examined in order to highlight its significance and relevance in investment disputes. Finally, the third part of this chapter elaborates on the way the concept of the Rule of Law interacts with certain aspects of investment arbitration, and, most importantly, how it could contribute to ending the legitimacy crisis. Eventually, the chapter argues that the Rule of Law constitutes a concrete theoretical framework to evaluate investment arbitration. This argument builds on the understanding that the Rule of Law could be and should be utilized as a framework through which legal developments in investment treaty arbitration can be analysed, compared, and evaluated. This in turn will help us address the research problem of this monograph. 3.2 Historical Origins of the Rule of Law 3.2.1 Classical Origins In order to take full advantage of the Rule of Law and to establish on which terms it is useful in the context of investment arbitration, one should focus on locating the historical origins of the concept. The broadest formulation of the Rule of Law refers