Originally from Investment Treaty Arbitration and International Law Volume 15

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I. INTRODUCTION

Nearly every recent discussion on the UNCITRAL and ICSID Draft Code of Conduct for Adjudicators begins with stating that the investment arbitration system is facing a “legitimacy crisis” and that it needs reform. Now that I have navigated this rite of passage by beginning in the same way, I want to add that the investment arbitration system was fundamentally imbalanced since its very inception, and functioned in this manner, away from public attention, until the mid-1990s. The legitimacy of the investment arbitration system has been in question for a long time. However, the economic landscape of the world has shifted in recent decades, finally prompting a long-overdue process of introspection within this area of international law.

Questions of ethics around the process of appointment and the independence of arbitrators have been debated for several years. The process towards the present Draft Code of Conduct began in May 2015, when the delegation of Algeria submitted a recommendation to the United Nations Commission on International Trade Law (UNCITRAL) to consider establishing a code of conduct or ethics for arbitrators in investment treaty arbitration, to bring together a set of values and behaviors that arbitrators must share, and even convey.  Criticism against investor-state dispute settlement (ISDS) from states, investors, academics, non-governmental organizations (NGOs) and the media had been on the boil for a long time and a reform movement was set in motion in 2015 after the European Union began to advocate for a permanent investment court with an appeal mechanism on the basis of a “fundamental and widespread lack of trust by the public in the old ISDS model.”