A Weather Map for International Arbitration: Mainly Sunny, Some Clouds, Possible Thunderstorms - ARIA - Vol. 26, No. 4
Originally from American Review of International Arbitration - ARIA
The School of International Arbitration at Queen Mary University of London recently hosted its 30th Anniversary conference, on “The Evolution and Future of International Arbitration: The Next 30 Years.” From the first session, participants were invited to share perspectives on how the field had evolved since 1985, as a baseline for exploring its future trajectory. The keynote speaker began by outlining the “sources” of international arbitration over 1985-2015, and its “general principles.” In response, this article considers a possible broad linkage between these two aspects. Specifically, it focuses on how the spread of Anglo-American influence may be linked to formalization in international arbitration principles, reflected in growing delays and especially costs.
Part I goes back in history to the earlier generation or era of international arbitration, the 30 years prior to the United Nations Commission on International Trade Law (UNCITRAL) Model Law of International Commercial Arbitration (1985). A significant portion of cases involved investment disputes with host states, yet the normative paradigm was distinctly more global and informal. Part II then takes a closer look at international arbitration’s contemporary and ongoing “move East.” It suggests that this new phase of globalization is – and will likely remain – characterized by ever-growing formalization of international commercial arbitration (“ICA”), due in particular to strong information asymmetries in this market for services.
Part III develops the counter-intuitive suggestion, however, that treaty-based investor-state arbitration (“ISA”) may eventually exert some counterbalancing influence, through the heightened transparency associated with this hybrid form of dispute resolution. Yet ISA also risks promoting even greater formalization, and there are serious doubts about the long-term viability of this system of international dispute resolution – including in the Asian region, where there remain some broader historical concerns about foreign investment in general. Part IV of this article concludes more generally by suggesting that the main theoretical underpinning for ICA has settled from the 1980s into a variant of “neoclassical” theory in contract law, with indeed some recent arguments for even greater formalization, in contrast to the theoretical “richness of contract law” described in the U.S. around 1997. Nonetheless, the growth of ISA opens the possibility of more theoretical diversity and therefore debate in the world of ICA as well.