Developing the Investment Dispute Resolution System: The Case for Open Appellate Review - ARIA - Vol. 30, No. 3
Originally from American Review of International Arbitration
The issue of appeal is hardly new in the administration of international justice in general, and in the area of international investment disputes, in particular. The usefulness of establishing an appellate court was debated within the International Court of Arbitration of the International Chamber of Commerce at the beginning of the 1930s. More than three decades ago, Hans Smit held that: “consideration should be given to whether the creation of a formal appellate stage in the arbitral process, at least in more substantial cases, would be a preferable alternative.” In a similar vein Elihu Lauterpacht wrote:
"The case for an integrated system of administering international justice is a strong one, not least in terms of the consistent development of the law. It is strongly arguable that cases are better decided by judges of experience than by arbitrators selected ad hoc for the purposes of a single case. Arbitration is, however, an important component of the international system and cannot be done away with. We should contemplate the possibility that its value may be enhanced if it is linked to a system of appeal."
Thus, it is submitted that, in order to ensure the further development of the international dispute resolution system for cross-border investment, its effectiveness and perceived legitimacy, and the strengthening of multilateral cooperation within the international investment regime, it is necessary to introduce appellate review (AR) as a central procedural reform. Such reform promises to alleviate and hopefully cure several of the procedural problems raised in recent years by voices critical of the system, while providing an opportunity to clarify, harmonize, and potentially develop international investment law in same areas, albeit within the limit of a (formally) non-precedential system of adjudication.
The article is structured as follows: section II reviews the main features of AR as it relates to investment dispute resolution. Section III then looks at possible institutional options to introduce appellate review within the investment dispute resolution system. Section IV examines from a normative perspective the main building blocks of a treaty-based AR mechanism, with the aim of canvassing a possible blueprint for such mechanism and hopefully contributing to the evaluation of this reform proposal. Section V concludes with some reflections on the political feasibility of the reform approach described in the article.