Reform of Investor-State Dispute Settlement: Lessons from International Uniform Law
11(1) Transnational Dispute Management (2014)
34 Pages Posted: 24 Jan 2014 Last revised: 11 Mar 2015
Date Written: February 19, 2014
This article argues that significant improvements in the quality and consistency of decision-making in investor-state arbitration can be achieved without taking such drastic (and possibly unachievable) steps as creating a global appellate body or standing international investment court, or enacting a new treaty that codifies the substantive obligations of international investment law for all signatory states. The article draws on the experience of the international uniform law movement to suggest realistic and achievable steps that could nevertheless be effective.
Although investor-state arbitration and uniform law are not entirely analogous, they do share some important similarities. In particular, they share the same basic goal (to create a fair, even, and predictable playing field for private relationships that cross borders) and the same basic challenge (how to deliver that degree of consistency without the factors that normally stabilize adjudication in national court systems, such as court hierarchies and a shared domestic legal culture).
This article is organized around three “questions asked” with respect to investor-state dispute settlement. For each, it describes the “answers” yielded by the experience of the international uniform law movement, and proposes how the insights gained might be put into practice in investor-state arbitration. The first two questions are doctrinal in character: what degree of consistency between investment tribunals should be the goal? and what should be the role of precedent in a decentralized, non-hierarchical interpretive community? On both of these issues, the international uniform law literature provides doctrines that are normatively attractive and that can feasibly be adapted to the international investment law context.
The third question is more practical: which non-binding aids to interpretation are most effective in promoting quality and consistency? A wide range of interpretive aids exist for various international uniform law instruments, providing an opportunity to identify best practices. In general, the international uniform law experience shows that substantial improvements in consistency and quality of decision-making can be realized even without the establishment of centralized administrative or appellate bodies or the enactment of new treaty regimes.
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