Enhancing the Procedural Legitimacy of Investor-State Arbitration Through Transparency and Amicus Curiae Participation
43 Pages Posted: 5 Jun 2008
Investor-state arbitration under NAFTA and the other investment treaties to which Canada is a party has been controversial. There are concerns that investor-state arbitration allows investors to challenge laws of general application intended to achieve important public policy objectives though a process that has been criticized as lacking in transparency and democratic accountability. This critique of investor-state arbitration is diminishing in potency, however, as arbitral tribunals have recognized the need for greater openness in promoting the legitimacy of the process and have adopted practices intended to achieve that goal. For example, tribunals have ordered open hearings and permitted amicus curiae participation. While all three NAFTA party states have strongly endorsed these practices, they have failed to amend NAFTA to guarantee them. Developments outside of NAFTA indicate that the move toward transparency is part of a larger trend, the strength of which may mean that the developments in NAFTA practice will be enduring. However, in the absence of comprehensive and predictable rules concerns about the legitimacy of the process are likely to remain.
Keywords: Investment, Arbitration, Trade
JEL Classification: K33
Suggested Citation: Suggested Citation