The Role of the UNIDROIT Principles of International Commercial Contracts in Investment Treaty Arbitration
A revised version of this paper appears in (2015) 64 International and Comparative Law Quarterly 905
34 Pages Posted: 29 Mar 2015 Last revised: 26 Feb 2016
Date Written: September 17, 2014
The UNIDROIT Principles of International Commercial Contracts have appeared in a small but steady trickle of investment treaty arbitrations over the last decade. This article considers investment tribunals’ use of the Principles on questions of both domestic law and international law. It suggests that reference to the Principles can play an important role of legitimation on questions of domestic law, but should not replace reference to the applicable law. On questions of international law, reference to the Principles may be justified by resort to the general principles of law. However, the article contends that there is only a limited role for the UNIDROIT Principles where the primary and secondary rules of investment protection are already found in treaties and custom. In addition, while general principles have historically been drawn from domestic private law, there is increasing recognition that general principles of public law are more relevant to investment arbitration. Given this, arbitrators resolving questions of international law must be cautious in references to the UNIDROIT Principles, a quintessentially private law instrument.
Keywords: UNIDROIT, PICC, investment treaty arbitration, general principles of law, primary and secondary rules, defence of necessity
JEL Classification: K33
Suggested Citation: Suggested Citation