Private Litigation in a Public Law Sphere: The Standard of Review in Investor-State Arbitrations

64 Pages Posted: 3 Sep 2009 Last revised: 11 Oct 2010

See all articles by William W. Burke-White

William W. Burke-White

University of Pennsylvania Carey Law School

Andreas von Staden

Westfälische Wilhelms-Universität Münster; Universität Hamburg


International arbitration and, particularly, investor-state arbitration is rapidly shifting to include disputes of a public law nature. Yet, arbitral tribunals continue to apply standards of review derived from the private law origins of international arbitration, have not recognized the new public law context of these disputes, and have failed to develop a coherent jurisprudence with regard to the applicable standard for reviewing a state's public regulatory activities. This problematic approach is evidenced by a recent series of cases brought by foreign investors against Argentina challenging the economic recovery program launched after a massive financial collapse and has called into question the legitimacy of investor-state arbitration more generally. A comparative analysis of public law standards of review from both other international courts and the domestic systems of the U.S. and Germany demonstrates that arbitral tribunals have a variety of standards of review from which they could borrow to develop a coherent jurisprudence. While any consistently applied public law standard of review that recognizes the competing public interests at stake in this new form of international arbitration would be preferable to the status quo, we argue that for reasons of institutional capacity, expertise, and embeddedness, the margin of appreciation as developed by the European Court of Human Rights may offer the best path forward. The consistent application of a margin of appreciation when reviewing public law regulatory activities of states would allow arbitral tribunals to grant appropriate deference to national authorities while simultaneously protecting investor rights, thereby helping to close the growing legitimacy gap in investor-state arbitration.

Keywords: Bilateral investment treaties, International Center for the Settlement of Investment Disputes (ICSID), International arbitration, standards of review, margin of appreciation, public law regulatory activities of states, foreign investors, protection of investor rights

JEL Classification: F21, K33, K41

Suggested Citation

Burke-White, William W. and von Staden, Andreas, Private Litigation in a Public Law Sphere: The Standard of Review in Investor-State Arbitrations. Yale Journal of International Law, Vol. 35, p. 283, 2010, U of Penn Law School, Public Law Research Paper No. 09-23, Available at SSRN:

William W. Burke-White (Contact Author)

University of Pennsylvania Carey Law School ( email )

3501 Sansom Street
Philadelphia, PA 19104
United States

Andreas Von Staden

Westfälische Wilhelms-Universität Münster ( email )

Scharnhorststraße 100
Münster, 48149

Universität Hamburg ( email )


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