Originally from the ICDR Handbook on International Arbitration & ADR - Third Edition
This chapter addresses three questions. Has investment treaty arbitration contributed to the practice of international commercial arbitration? If so, what has that contribution been? And what accounts for that contribution? My answer to the first question is yes. Indeed, not only has investment treaty arbitration had an impact on international commercial arbitration in the relatively few years since it arrived on the scene, that impact has been significant. The balance of the chapter will look at those impacts and the reasons for them.
II. Historical Context
Investment treaty arbitrations arise under multilateral and bilateral investment treaties entered into between States to encourage foreign investment. These treaties usually provide for arbitration of disputes between a private foreign investor and the host State under public international law.
Although investment treaty arbitration is a relatively new genre of international arbitration, arbitration itself has been used to resolve public international disputes since the beginnings of recorded history. From the ninth to the fourth century before the Common Era, for example, contemporaneous accounts describe some 110 arbitrations between the various city-states of ancient Greece. The modern era of international arbitration is generally thought to have begun with the arbitrations between Great Britain and the United States under the 1794 Jay Treaty (of Amity, Commerce and Navigation). The 19th and early 20th centuries saw dozens of arbitral commissions, modeled on those of the Jay Treaty, resolve tens of thousands of international law claims arising due to wars, insurrections, revolutions and the like.