The relevance of the UNIDROIT Principles in investment arbitration

Abstract

This article aims at ascertaining the role and relevance of the UNIDROIT Principles of International Commercial Contracts (PICC) in investment arbitration. The PICC are ‘a non-legislative codification or “restatement” of the law of international commercial contracts in general’ produced by a group of independent academics and experts representing all of the major legal systems of the world. The PICC are assumed to be particularly apt to be used as applicable law in international commercial disputes that are to be solved by arbitration, as opposed to national courts of law. A sub-set of these international arbitrations arise in the context of investment disputes; and while many of the rules governing the applicable law to this sub-set are similar to commercial arbitration, there are also key distinctions. This article will look specifically at the sources that regulate which law is applicable in investment arbitration in general. An analysis of these sources will show that, to varying degrees, investment arbitration is open to the application of sources such as ‘rules of law’ and international law, independently or in combination with national law (which under certain circumstances can include the PICC). Using a comprehensives set of investment arbitration cases referencing the PICC, this article will assess to what extent the PICC have been or may be used as ‘rules of law’ that govern the dispute, as a source of international law, as corroboration of international law, as corroboration of national law or as a correction of national law.