Rule of Law and Human Rights in Investment Arbitration—Need for Judicial Reforms

Abstract

Abstract Chapter 7 discusses the need for reforming investment law and arbitration and the problems which bilateral WTO appellate arbitration could pose for the coherence of world trade law. Like international trade law, the historical evolution of investor–state arbitration reflects conflicting neo-liberal, state capitalist, and ordo-liberal conceptions of economic law. Case studies demonstrate that even if human rights were invoked as investor claims, as defences of the host state, by third-party interveners or by arbitrators ex officio, the impact of human rights law on arbitration awards tended to remain marginal, for example due to the more precise and higher investment protection standards in investment treaties. The investor biases in investment treaties and arbitration (e.g. offering foreign investors higher protection standards than domestic investors) require procedural and substantive reforms like stronger protection of public interest legislation in investment law and arbitration procedures. Yet, it remains doubtful whether the United States and China will give up their past resistance against EU proposals for transforming the multilateral arbitration procedures of the International Center for the Settlement of Investment Disputes and of the UN Commission on International Trade Law (UNCITRAL) into new forms of public law adjudication by multilateral investment courts.