'Back to the Future' for Investor-State Arbitrations: Revising Rules in Australia and Japan to Meet Public Interests
Luke R. Nottage
University of Sydney - Faculty of Law; University of Sydney - Australian Network for Japanese Law
University of Sydney - Faculty of Law
June 25, 2008
In L Nottage & R Garnett (eds), 'International Arbiration in Australia', Federation Press: Sydney, 2010
Journal of International Arbitration, Vol. 26, No.1, pp. 25-58, 2009
Sydney Law School Research Paper No. 08/62
The more things change, the more some stay the same. Our paper first highlights renewed concerns about delays and, especially, costs in international commercial arbitration (ICA). Many now urge quite radical solutions to make ICA more efficient, including allowing parties to authorise arbitrators to facilitate settlement (Arb-Med). At the same time, there are growing calls for more transparency, non-party participation, and other rule changes to promote the legitimacy of the burgeoning field of investor-state arbitration (ISA). Such reforms are justified by the greater variety of public interests involved in ISA, despite some possible losses in efficiency (Part 2). We should resist a tendency simply to extend the solutions devised or proposed for ICA, particularly in the form of Rules of arbitral institutions, to contemporary ISA. However, some reforms incorporating proper safeguards may also be advisable in both fields, such as Arb-Med processes, or arbitrator remuneration providing better incentives to streamline proceedings. Many reforms can be implemented by institutions devising tailored ISA Rules, to be added as options for investors in bilateral or regional investment treaties or Free Trade Agreements (FTAs: Part 3). Our paper therefore proposes a variety of improvements (Part 4). These are based on comparisons of the main Rules adopted for ISA (ICSID and the UNCITRAL Rules), the Arbitration Rules of institutions like the Australian Centre for International Commercial Arbitration (ACICA) and the Japan Commercial Arbitration Association (JCAA), and some of the provisions already found in Australia's FTAs or governing trade disputes under the World Trade Organisation (WTO) system. Hopefully, these improvements will enable ISA to keep developing through bilateral initiatives such as the proposed Australia-Japan FTA, emerging regional initiatives, and ultimately a multilateral framework for investment (Part 5). Although reforms are currently needed to bolster the legitimacy of ISA, longer-term reforms may instead re-emphasise efficiency, rather like ICA has done after decades spent achieving global acceptance.
Number of Pages in PDF File: 38
Keywords: international investment law, investment arbitration, international commercial arbitration, Australia, Japan
JEL Classification: K33, K20, K10, F23
Date posted: June 25, 2008 ; Last revised: July 14, 2010
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