Originally from World Arbitration And Mediation Review (WAMR)

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SUMMARY: PRECEDENT AND CONTROL IN

INVESTMENT TREATY ARBITRATION
By Tai-Heng Cheng*

In Precedent and Control in Investment Treaty Arbitration, Tai-Heng
Cheng recognizes that there is no formal system in arbitration that requires
adherence to prior awards, but argues that, informally, arbitrators rely on
past awards especially in the area of investment treaty arbitration.
Arbitrators need to respect prior, published awards to achieve some level of
uniformity in international law.1

The public courts of any State are akin to State-sponsored dispute
resolution.2 When parties submit a dispute to an arbitral tribunal instead of a
public court, the tribunal, although private, has some of the same goals of
the public courts.3 Unlike public courts, however, the arbitrator’s awards
are only binding on the parties because only the parties asked the tribunal to
render an award.4

Cheng suggests that, although arbitrators are not formally compelled to
use prior awards in rendering their decisions, in reality, arbitrators do look at
prior awards for guidance.5 According to the author, when rendering
awards, arbitral tribunals:

(1) identify prior relevant decisions;
(2) compare the aggregate costs of departure from prior
decisions with the aggregate consequences of following
prior decisions, taking into account whether the policies
underlying those prior decisions remain relevant under
contemporary conditions;