International investment arbitration, also known as “investor-state” arbitration, represents a significant development in international adjudication. The fact that an investor, such as an individual or a corporate entity, may have standing to enforce international law obligations, and then receive monetary compensation from a state, is a relatively new phenomenon in the development of international law. These arbitrations typically occur under international law before select tribunals of individuals which include some of the highest regarded practitioners in the international law community. The mix of public international and municipal law interaction, international commercial arbitration practices permeating the arbitral process, as well as the ever present tension between public policy and private interest, make international investment arbitration a particularly topical course of study. In particular, students interested in a general introduction to international adjudication, or those who have already taken the investment law or policy courses, should consider this seminar as a means to delve further into this fascinating area of international law practice.
From a few published decisions per year only ten years ago to hundreds of decisions in 2014, investment arbitration has become an active testing ground for the development of international adjudication. Further, the recent US$50 billion award against Russia in the Yukos arbitration demonstrates the far-reaching powers of an arbitral tribunal. This seminar will examine the practical issues that commonly arise in the course of an investor-state arbitration, from the initial claim and organization of the tribunal and arbitration process, through the building of the claim, and the defense, to the final award. We will study aspects of the law of evidence, arbitral procedure, remedies, ethics and jurisprudence as applied to investment protection. Our focus will be on arbitrations conducted pursuant to bilateral investment treaties (or equivalent provisions in free trade agreements) and under the rules of the International Centre for the Settlement of Investment Disputes at the World Bank (ICSID) and the UN Commission on International Trade Law (UNCITRAL). Perhaps most importantly, we will focus on the key players in investment arbitration, the parties, counsel, arbitrators and the institutions, including such matters as the appointment of arbitrators, the role of the key arbitral institutions, and the avoidance of parallel proceedings.
This course does not deal with litigation of disputes arising out of international business transaction before national courts. Nor is it a course about the substantive law of foreign investment (even though we will touch upon the fundamental obligations, such as compensation for expropriation and fair and equitable treatment). It is also not a course about foreign investment and public policy, the WTO or trade in goods. Although sometimes helpful, knowledge of economics is not assumed nor required.
Evaluation will be based on class participation and a final exam. An underlying theme that students should consider in every seminar is whether the existing model for investor-state arbitration is the correct model. This proposition involves several sub-components that need to be examined: Are there any deficiencies in the model? Can these deficiencies be remedied? Are there other models (e.g. court model) that would be more desirable? Should we abandon the existing arbitral model altogether or should we modify it?
Assigned Text: Dugan, Wallace, Rubins, Sabahi, Investor State Arbitration (Oxford University Press, 2011)
Grading: Exam and Class Participation
30%: Class participation (and its relevance to the theme) in the seminar. We expect you to have read the materials and prepared for the class and expect you to participate in the discussions.
70%: 8-hour, take-home exam.