Are Arbitrators Biased in ICSID Arbitration? A Dynamic Perspective

51 Pages Posted: 27 Jul 2018 Last revised: 23 Jan 2021

See all articles by Weijia Rao

Weijia Rao

George Mason University - Antonin Scalia Law School, Faculty

Date Written: June 26, 2018

Abstract

Concerns over arbitrator impartiality and independence in ICSID arbitration have led to reform proposals geared towards a multilateral investment court. Due to the ad hoc nature of appointments, it has been suggested that arbitrators may strategically render decisions in biased ways with the goal of encouraging reappointments. Although criticism against arbitrator bias has attracted significant attention, so far limited empirical evidence has been provided to support such concerns. This paper introduces a dynamic perspective to examine concerns of bias arising from ad hoc appointment. I find that contrary to conventional views held by critics of investor-state arbitration, on average, arbitrators tend to decide against their reputation from prior decisions in ICSID arbitration, which implies an effort to establish a reputation for being neutral and unbiased. This finding challenges one of the premises of proposals to replace arbitration with an investment court.

Keywords: ICSID arbitration, arbitrator bias, international investment court, investor-state dispute settlement reform

Suggested Citation

Rao, Weijia, Are Arbitrators Biased in ICSID Arbitration? A Dynamic Perspective (June 26, 2018). International Review of Law and Economics, Forthcoming, Available at SSRN: https://ssrn.com/abstract=3203019 or http://dx.doi.org/10.2139/ssrn.3203019

Weijia Rao (Contact Author)

George Mason University - Antonin Scalia Law School, Faculty ( email )

3301 Fairfax Drive
Arlington, VA 22201
United States

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