Originally from Pro-Arbitration Revisited: A Tribute to Professor George Bermann from his Students Over the Years

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I. INTRODUCTION

Reflecting upon whether a policy or practice should be considered “pro-arbitration”, Professor Bermann in a recent article wisely argues that “too often missing (..) is consideration of values that are largely extrinsic to arbitration itself. In fact, acknowledging legitimacy—measured in terms of extrinsic values—as in itself a pro-arbitration attribute may be among the most arbitration-friendly moves one can make.“ [George A. Bermann, What Does it Mean to be “Pro-Arbitration”?, 34 ARB. INT’L 341 (2018), p. 353]. 

Nowhere does this assertion ring truer than in the increasingly contested field of investment arbitration. Even though Professor Bermann in his article mainly refers to international commercial arbitration, noting that it is difficult to separate arbitration as a foreign investment dispute resolution from foreign investment law and policy, it is worth examining to what extent currently discussed ISDS measures are “pro-arbitration”, what values extrinsic to arbitration should be taken into consideration in measuring their contribution to legitimacy, and, importantly, how these values may change in different country contexts.  

This essay explores the question of what it means to be “pro-arbitration” when assessing ISDS in a developing country context. Following a brief review of popular ISDS reform proposals, it is argued that these proposals—while they may be “pro-arbitration”—fail to address one of the most important extrinsic values for developing countries: the promotion of economic development. To leverage ISDS in the context of development, policymakers—and arguably also the international arbitration community—should focus attention on two often overlooked “pro-arbitration” virtues: the implementability and implementation of investment protection guarantees.