Seeing the Forest Without the Trees – The Doubtful Case for Proportionality Analysis in International Investment Arbitration
Highly Commended Essay, Society of International Economic Law/Cambridge University Press Essay Prize 2011
19 Pages Posted: 14 Sep 2011 Last revised: 31 Jul 2017
Date Written: September 12, 2011
Proportionality analysis has been positioned in the academic debate as intrinsically linked to constitutional regimes and the specific structure of fundamental rights. The present contribution takes up the arguments developed in other fields of law and examines their validity in the context of investor-state arbitration. Rejecting the conceptualization of investment arbitration as a developing constitutional regime, the author suggests that the conceptual foundations for using proportionality analysis are shaky, both based on the nature of the rights typically enshrined in bilateral investment treaties and on the features of investment arbitration. A subsequent overview of the case law brings to light that arbitral tribunals to date have shied away from relying extensively on proportionality analysis and have only paid lip service to the concept on a rather limited number of occasions. Future case law, it is suggested, should thus rather focus on the development of appropriate criteria for each treaty provision instead of opting for balancing approaches.
Keywords: international investment law, investment arbitration, proportionality, balancing
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