International Investment Law Journal
Volume 4, Issue 2, July 2024

Table of Contents

• Contents
  

  
  

• Senior researcher PhD. Federica CRISTANI; Senior research fellow Marina TRUNK-FEDOROVA; Associate professor Cristina Elena POPA TACHE
  
  Abstract:

  This editorial reflects on the discussions held during the workshop 'Pursuing Fairness in Times of Crisis: Reflections on the Future of International Economic Law', organized by the Interest Group on International Economic Law of the European Society of International Law (ESIL). The workshop highlighted the challenges and ethical dilemmas related to fairness in international investment arbitration. The selection of five contributions for this special edition from a multitude of submissions underscores the diversity and complexity of the topics addressed. The editorial also highlights the decline in new investment treaties in recent years, analyzing factors such as economic nationalism, geopolitical tensions, and the reassessment of existing treaties. In the current context, investment treaties remain crucial but require ongoing reassessment to ensure a fair balance between investor protection and state sovereignty.
  Keywords:European Society of International Law, investment arbitration, treaties, state sovereignty.
  JEL Classification:F21, K33, K41, O10
  DOI: 10.62768/IILJ/2024/4/2/01
  Editorial: The Workshop ‘Pursuing Fairness in Times of Crisis: Reflections on the Future of International Economic Law’ Held within the 2023 ESIL Annual Conference
      Page 131
  
  
• Associate professor Paolo VARGIU
  
  Abstract:

  This article addresses the role of arbitrators and the everlasting tension amongst personal morals and interpretive rigour. Critiques of investment law have traditionally underscored the lack of balance in power between foreign investors and host states under BITs and FTAs and have especially emphasized how investment arbitration is a mechanism that aggravates imbalances and engenders inequitable outcomes. Frequent appeals for the reform of investment arbitration resonate amongst scholars, states, and international organizations, with the appointment of arbitrators and their conduct facing intense scrutiny. Arbitrators, endowed with powers akin to those of adjudicators, demonstrate at times a concerning attitude towards the rigorous interpretation of applicable laws, often overlooking the public international law nature of BITs and FTAs and, on occasion, approaching investment disputes as though they were merely commercial arbitration cases. The conflation of the two types of arbitration has had adverse effects, resulting in dubious awards and decisions. The increasing number of so-called mega-awards exacerbates the problem, as their significance for host states is not necessarily commensurate with the rigor of the legal reasoning underpinning them. This has progressively led to an erosion of trust in investment arbitrators and numerous calls for greater accountability of arbitrators. However, one may argue that even the most rigorous interpretations of BITs and FTAs unavoidably favour the interests of foreign investors due to the inherent nature of such agreements, which prioritize the rights and protections of foreign investors over the interest and welfare of host states and their populations.
  Keywords:arbitration, ethics, professional duties, investment, public international law.
  JEL Classification:K33, K41, F53
  DOI:10.62768/IILJ/2024/4/2/02
  Down the Rabbit Hole of Investment Arbitration and Ethics
      Page 137
  
  
• Attorney Marina-Elissavet KONSTANTINIDI
  
  Abstract:

  The present paper examines the principle of impartiality and its significance in the context of party-appointed arbitrators in international investment and commercial arbitration. It reflects on how cognitive biases influence decision-making in arbitral disputes and how such biases can be mitigated to enhance the credibility and fairness of international dispute resolution procedures. Arbitration is a common mechanism for resolving disputes in international investment law, with parties often appointing tribunal members. However, the impartiality of these arbitrators is frequently questioned. Cognitive biases, such as confirmation bias and anchoring bias, can significantly impact the fairness of arbitration by affecting how evidence is perceived and evaluated. This study explores the relationship between cognitive biases and arbitrator impartiality, considering the role that such biases may play in the outcome of an arbitration process. Integrating doctrinal legal analysis with empirical insights from psychology, the paper aims to provide a comprehensive understanding of impartiality challenges faced by party-appointed arbitrators. It analyzes institutional measures like the duty of disclosure and ethical guidelines, alongside the theoretical framework of the ‘devil’s advocate’ approach, to propose effective strategies for mitigating biases. By enhancing understanding of these issues, the paper aims to contribute to the ongoing debate on the fairness of arbitration in international investment and commercial law.
  Keywords: impartiality, cognitive biases, party-appointment, international arbitration, investor-State disputes, duty of disclosure.
  JEL Classification:K33, K40, K41
  DOI:10.62768/IILJ/2024/4/2/03
  Beyond Cognition: Are Party-Appointed Arbitrators Truly Impartial?
      Page 154
  
  
• PhD. candidate Erik W. BROUWER
  
  Abstract:

  This paper considers the proposals advanced by some States in the context of the ISDS reform process at UNCITRAL’s Working Group III to curb a perceived tendency towards (too) “high” awards on damages in investment arbitration proceedings and “inconsistent” approaches to valuation methodologies. Based on analysis of the arguments brought forward in that discussion, it is argued that while clear procedural guidelines on the application of the valuation methodologies used by arbitrators would be a commendable outcome of the reform process, other proposals aimed at capping damages based on equitable considerations or contextual factors, including the financial capacity of the host State, pose more questions and may be more properly addressed in other venues or through existing tools.
  Keywords: compensation; damages; ISDS reform; full reparation; contextual factors; equitable considerations; crippling compensation.
  JEL Classification:K33, K41
  DOI:10.62768/IILJ/2024/4/2/04
  A Fair (?) Quantification of Damages in Investor-State Arbitration Proceedings: Reflections from the UNCITRAL Working Group III ISDS Reform Process
      Page 165
  
  

• Assistant professor Klara Polackova VAN DER PLOEG
  

  Abstract:

  The normative asymmetry between the rights and obligations of investors and host states under investment treaties' has been a key reason for the common characterization as “unbalanced”. While initially a description of a justified treaty design, imbalance has since become a central component of the legitimacy challenges to the investment treaty regime: a normative demand of the treaties’ realignment. Identifying the imbalance critiques of investment treaties as fairness-based critiques concerning the distributive implications of investment treaties, the article considers to what extent including provisions on investor conduct in investment treaties may address the concerns about potential unfairness in the allocation of rights and obligations under these treaties. In particular, the article argues that understanding the imbalance critiques as concerns of distributive justice enables the assessment of investment treaty design innovations and the alternative ways in which these instruments could be structured to produce different distributive outcomes.
  Keywords: investment treaties; investment agreements; justice; legitimacy; investor rights and obligations.
  JEL Classification:K33
  DOI:10.62768/IILJ/2024/4/2/05
  Fairness as Balance: Investor Obligations and Investment Treaty Reform
      Page 184
  
  
• Associate professor Cristina Elena POPA TACHE; Associate professor Cătălin-Silviu SĂRARU
  
  Abstract:

  The dynamic intersection between administrative law and public international law in the context of state contracts leads to a more adequate analysis of the evolution of the legal framework from historical perspectives to contemporary practices. Our mode of study deepens the complex relationship between these two legal fields, with an emphasis on the transformations and legal mechanisms that have governed state contracts over time. For the development of this study, the analytical approach and the comparative approach were applied through the analysis of the legal text, jurisprudential concepts with critical discussions, the analysis of the jurisprudence as well as the descriptive approach to describe the researched phenomenon.
  Keywords: international investments, state contracts, international law, administrative law, state immunity.
  JEL Classification:K33, K38
  DOI:10.62768/IILJ/2024/4/2/06
  Yesterday and Today for State Contracts – Explicationibus on the Routes of Administrative Law and Public International Law
      Page 198