Event report
Future of investor-state arbitration in
serious doubt
Tribunals’ failure to properly value
major foreign investments and the
failure of investment arbitration to
respect democratic principles mean
confidence in the system is diminishing
The future of investor-state
arbitration is being questioned with
some lawyers speculating that such
disputes will disappear, attendees
at a recent Iberian Lawyer/
Kluwer International event held in
Washington DC heard. Speakers
at the event said that the future
of investment arbitration was in
doubt given the failure of tribunals
– which often lack expertise in
economics – to handle the complex
economic exercises needed to value
major foreign investments affected
by adverse state measures.
Participants also suggested that
the future of investment arbitration
Event moderator:
could be doomed because of its
failure to respect democratic
principles, which is one of the main
criticisms levelled at it, attendees
heard. Other criticisms include
a lack of transparency, a lack of
consistency, as well as limited
security. Support for investment
arbitration is also diminishing
because in cases where states want
to expropriate without paying
compensation, foreign investment
is prioritised over domestic
investment. Participants said this
was because investment treaties
impose a rule of law that goes
beyond the domestic scenario and
the aim of arbitration is to protect
investors.
Public interest concerns
Investor-state dispute settlements
have led to public interest concerns
Participants heard investor-state dispute settlements have led to public interest
concerns
Nigel Blackaby
Freshfields Bruckhaus Deringer
Panel members:
Carolyn Lamm
White & Case
Claus von Wobeser
Von Wobeser y Sierra
Donald Francis Donovan
Debevoise & Plimpton
J. William Rowley
20 Essex Street
Marco Schnabl
Skadden, Arps, Slate, Meagher &
Flom
Yves Derains
Derains & Gharavi
that have led to demands for
greater transparency, consistency
and public participation. Calls
have been made for the creation
of a permanent watchdog to hear
disputes and impose transparency
and for a categorisation of conduct
that violates trade agreements.
However, the solutions proposed
face procedural and legal
obstacles, attendees were told. One
participant cited the example of
NAFTA, which after 22 years has
still failed to instate an investment
arbitration mechanism.
With regard to the issue
of whether tribunals are up
to the task of valuing major
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