What's Really Wrong With ISDS?—A Critical Analysis of Phantom Issues and Real Issues Triggered by Practice and Technological Development

34 Pages Posted: 31 May 2024

See all articles by Stephan Wilske

Stephan Wilske

Heidelberg University; Leibniz Universität Hannover; German University for Administrative Sciences Speyer

Matthew T. Adams

University of North Carolina (UNC) at Chapel Hill - University of North Carolina School of Law

Date Written: May 31, 2024

Abstract

This paper deals with phantom issues and real problems of Investor-State Dispute Settlement (hereinafter “ISDS”), as well as possible solutions to the most pressing threats that surfaced in global practice. In particular, the authors discuss the phenomenon of double-hatting, third-party funding, transparency and the often-unwelcome limitation of the national sovereign’s regulatory powers. After explaining the nature of the aforementioned issues, the article delves deeper into—what the authors perceive to be—the real issues of ISDS. Designated as such are case complexity and length, the question of appropriateness of arbitral assistance, and the rising problem of scarcity of suitable arbitrators. After elaborating the real threats, the authors specify existing and proposed solutions to these matters, with a special regard to the use of Artificial Intelligence (hereinafter “AI”) and the growing importance of an arbitrator team approach. Within this context, the paper dives deeper into the utilization of AI in dispute resolution and the authors critically discuss the benefits and disadvantages of the adaptation of the role of an arbitrator, which the introduction of AI would undoubtedly entails. This paper, overall, displays the problems arising from stereotypes in the world of ISDS and whether they are practical or rather obstructive.

Keywords: Investor-State Dispute Settlement, ISDS, phantom problems, double-hatting, transparency, third-party funding, national sovereignty, inconsistencies in decisions, administrative secretary, Artificial Intelligence, AI, arbitrator team approach, access to justice, Rule of Law, Multilateral Investment Court, ICSID Rules and Regulations, regulatory powers, regulatory chill effect

Suggested Citation

Wilske, Stephan and Adams, Matthew T., What's Really Wrong With ISDS?—A Critical Analysis of Phantom Issues and Real Issues Triggered by Practice and Technological Development (May 31, 2024). Contemporary Asia Arbitration Journal, Vol. 17, No. 1, pp. 1-34, Available at SSRN: https://ssrn.com/abstract=4849445

Stephan Wilske (Contact Author)

Heidelberg University ( email )

Grabengasse 1
Heidelberg, 69117
Germany

Leibniz Universität Hannover ( email )

Welfengarten 1
D-30167 Hannover, 30167
Germany

German University for Administrative Sciences Speyer

Freiherr vom Stein Strasse 2
Freiherr vom Stein Strasse 2
Speyer, D-67346
Germany

Matthew T. Adams

University of North Carolina (UNC) at Chapel Hill - University of North Carolina School of Law ( email )

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