Although final determination of the merits of the dispute is still several years in the making, Abaclat v. Argentine Republic1 has already been declared one of the most controversial arbitrations to arise in recent years.2 The proceedings address several noteworthy items as a matter of first impression, including the question of whether sovereign bonds constitute an "investment"3 under the relevant treaties.4 However, much of Abaclat's notoriety is due to the unusually large number of claimants in this case, 60,000 Italian bondholders who were seeking to join their claims together in a single proceeding.5 While both the claimants and a majority of the arbitrators were quick to note that the arbitration was not brought on a classwide basis,6 the framing of the procedure as involving "mass" rather than class claims has done little to diminish concerns that U.S. litigation techniques, most particularly the dreaded class action, are currently making their way into international investment law.7
Although Abaclat marks the first time that an investment tribunal has accepted jurisdiction over a proceeding of this nature,8 it is not the first time that a large-scale claim has been brought in the context of treaty-based arbitration,9 nor is it likely to be the last. Two other group claims against Argentina are currently pending,10 and commentators have speculated about opportunities for mass investment arbitrations in other contexts.11
While there is still a long way to go before the jurisdictional awards rendered in Abaclat can be considered final,12 the majority and dissenting awards will doubtless prove groundbreaking on a number of important issues. Certainly there will be extensive analysis regarding the arbitrability of sovereign debt concerns, the interpretation of silence in an investment treaty, and a variety of related matters.13 However, this Article focuses on perhaps the most challenging and controversial issue, namely the question of the propriety of mass procedures from an international regulatory law perspective.
The idea of investment law as a form of international regulation is not new.14 Indeed, a growing number of commentators have framed the international investment regime as reflecting a type of "global administrative law"15 or "global governance."16 However, most of the analysis has centered on the way in which the various treaties and international agreements are said to constitute a type of "international legislation."17 While there is a continuing need to consider the ways in which international investment law constitutes a form of traditional regulation, this Article brings a new critical perspective-that of new governance theory-to bear on the question of mass procedures in investment arbitration.18
New governance analysis reflects "a widespread movement away from a top-down approach in public governance to an increasingly hybrid interaction of public and private actors."19 One area of inquiry involves the concept of regulatory litigation, which arises when a "diffuse set of regulators," including "private citizens, public regulatory bodies, nongovernmental organizations, and private market agents[,] . . . regulate social harm"20 by "us[ing] litigation and the courts to achieve and apply regulatory outcomes to entire industries."21 For years, regulatory litigation has been considered primarily a U.S. phenomenon, given the widespread reliance in the United States on private attorneys general to enforce various public laws in an otherwise highly deregulated market environment.22 However, other legal systems have also begun to consider the potential usefulness of this sort of regulatory device, and it may be that Abaclat has brought regulatory litigation techniques into the world of investment arbitration.23
One of the best-known forms of regulatory litigation is the U.S. class action, which uses large-scale representative relief, often combined with punitive or treble damages, to achieve a variety of goals, including those of a regulatory nature. …