International investment arbitration, as a species of international dispute resolution, is unique because it provides an investor with the option to initiate direct legal action against a state. In that sense, the international investment arbitration regime shares similar characteristics with the human rights regime, since both regimes create exceptions to the general rule in public international law that it is the law between sovereign states. International investment arbitration, however, can have strong consequences for a state as demonstrated in the recent US$50 billion judgement against Russia in the Yukos arbitration, which in turn highlights the far-reaching power of arbitral tribunals usually with just three members and a limited appeals mechanism.
Commentators and scholars alike have devoted careful thought on critiquing this unique area of law. While much has been written on the woeful absence of women in international investment arbitration, this article focuses on issues relating to nationality and race. This is important because “international investment arbitration” as a genus of international arbitration should be, in fact, international. Critics often lambaste this area for not being truly international, citing among others the following: (i) the vast majority of the arbitrators commonly selected come from western, developed world, (ii) the regime is “pro-investor,” and most investors come from developed countries, and (iii) the law applied by the tribunals principally follows western, developed countries’ legal principles and traditions.