A Critique of Investment Treaties and Investor-State Arbitration

The treaty-based investment law regime is based on the most powerful system of international adjudication in modern history.¹¹See generally Van Harten, Investment Treaty Arbitration and Public Law (2007); Van Harten, Sovereign Choices and Sovereign Constraints: Judicial Restraint in Investment Treaty Arbitration (2013). In essence, the regime re-allocates power from states to transnational companies and from domestic courts to a private arbitration industry based in Washington, New York, London, Paris, The Hague, and Stockholm.²²I speak in particular of the roles in international arbitration of large law firms in these centres and of the World Bank’s International Centre for Settlement of Investment Disputes (ICSID), the London Court of International Arbitration (LCIA), the International Chamber of Commerce (ICC) and its International Court of Arbitration, the Permanent Court of Arbitration (PCA), and the Arbitration Institute of the Stockholm Chamber of Commerce (SCC). It remains a recent development in international adjudication, having been put into widespread use only from the mid-1990s. Further, the arbitrators have wielded their power assertively through both expansive legal interpretations and the economic size of their awards. Not coincidentally, there is growing apprehension about the regime and pressure for reform.