International investment arbitration is in a state of evolution. Recent decades have seen a surge in the adoption of investment treaties providing for arbitration as the mechanism for dispute resolution as well as an increase in the number of investment arbitrations filed under these treaties. However, in spite of – or perhaps because of – the rise in investment arbitration proceedings, doubt persists about whether the present system of investment dispute resolution is sound or whether there is a need for major structural reform. In particular, misgivings have been expressed regarding the lack of coherence and predictability in the current framework, leading to widespread concern that the system is facing a legitimacy crisis and needs to be recalibrated.
For some, the present investment arbitration system is satisfactory and requires little improvement. However, there is a growing concern that the actors in the system are wearing too many hats by serving as both arbitrators and counsel, leading to increasing conflicts of interest issues and the perception that arbitrators lack the requisite independence to maintain legitimacy. Likewise, there are concerns that the ad hoc nature of investment tribunals leads to inconsistent and conflicting decisions with no oversight or control, further undermining the predictability and sustainability of the system.
One proposal to streamline the current investment dispute resolution system is to create a single international court for the resolution of investment claims (hereinafter described as an “Investment Court”). Although there is much to be said on the subject of an Investment Court and its attendant benefits, this paper will focus on the narrower subject of the advantages of a standing juridical body within such an institution.