Academic journal article American University International Law Review

The Ideal Arbitrator: Does One Size Fit All?

Academic journal article American University International Law Review

The Ideal Arbitrator: Does One Size Fit All?

Article excerpt

I. introduction

Arbitrators are diverse, independent, and hold resolutely different opinions, but in the world of investor-State disputes arbitrators are often viewed as a kind of closet oligarchy, a conclave of the powerful concealing their power under the veil of practice and the modalities of an arbitral profession that is actually of rather recent origin. The growth of investment treaty arbitration in recent decades has been met with a wave of criticism, calling into question not only the arbitrator's technical abilities but also his or her ethics. The criticisms levelled against arbitrators in investor-State disputes are not made against arbitrators in international commercial arbitration, or at least not with the same frequency and vigor. There are suggestions, for example, that it is unethical to act both as arbitrator and counsel, even in unrelated investment disputes. This proposition does not seem to trouble international commercial arbitrators and, if taken literally, would make it more difficult to create the second generation of investment arbitrators. There are also cries for transparency and greater publicity, including third party intervention: again, this is not a critique made of international commercial arbitrators. Further, there are demands for appellate mechanisms and for an international investment court system (with its own court of appeal). In contrast, finality is seen as a core attribute of international commercial arbitration.

This outpouring of concern over the arbitrator has not been, for the most part, triggered by the performance of arbitrators in any given case. It is not a consequence of malfeasance. Rather it has been a reaction to a perceived lack of accountability associated with an exaggerated image of the arbitrator's decisional power. Many are uncomfortable that investors can sue States on matters implicating the public interest and that States' liabilities are determined by party-appointed arbitrators pursuant to secretive rules imported from international contract disputes.

This sentiment was captured by Joost Pauwelyn:

ISDS is in a state of crisis in many parts of the world, and much of the criticism is focused precisely on who is deciding ISDS cases. The investment regime is said to be governed by arbitrators, rather than states. Arbitrators are labelled as "private judges" operating in secrecy, biased in favor of large multinationals, without regard to conflicts of interest and issuing inconsistent decisions. . .the world investment regime seems, at present, to have too much rule of lawyers and not enough rule of law.1

This article will focus on the expansion of expectations of the arbitrator in the cognate fields of international commercial arbitration and investment treaty arbitration. The false premise that there is an ideal arbitrator for all situations - a sort of "perfect arbitral being" - provides a launching pad to discuss what skills and qualities are demanded of the arbitrator in the more or less contentious arena of international arbitration, and for exploring current proposals, such as the European Union's (EU) investment court system.

Before proceeding, it is helpful to briefly revisit what is meant by "international commercial arbitration" on the one hand and "investment treaty arbitration" on the other. International commercial arbitration is conducted between parties from different States, usually private parties, usually pursuant to arbitral rules incorporated into a prior contract between the parties.2 Investment arbitration is conducted between a foreign investor and a host State in which the investment is located, usually pursuant to a dispute resolution clause in a bilateral or multilateral investment treaty, with the claimant's choice of forum being made ad hoc, after the underlying dispute has arisen.3 The two fields overlap and have always overlapped. Commercial arbitrators pioneered the investment arbitration system at a point in time when it was thought that most disputes would arise under contracts between investors and governments, rather than under multilateral or bilateral treaties. …

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