Originally from: Investment Treaty Arbitration and International Law - Volume 6

POSSIBILITY OF ESTABLISHING AN APPEAL MECHANISM

The possibility of establishing an appeal mechanism for investment arbitration has been debated for several years now. It seems to me that there has been somewhat of an acknowledgement that it is either not a good idea or that it faces insurmountable problems. I do not agree. It is worth taking a fresh look at the issue. I do so here from a different angle and a regional perspective, but without losing sight of the broader global view. This risks getting into the old discussion of whether regional agreements are building blocks or stumbling blocks in the global context, but if the discussion is bound to go anywhere, it has already got a head start in the region because several international investment agreements (IIAs), namely those that have been signed with the U.S. since 2003, already contemplate the possibility of an appeal mechanism and call for a discussion to that effect. There is also much greater uniformity among the IIAs in the Americas than elsewhere, and that provides a more suitable setting – although the lack of uniformity is not really an obstacle, as will be seen.

IS THERE A NEED FOR AN APPEAL MECHANISM?

The idea of an appellate mechanism for international arbitration is not new. It was discussed as far back as the Peace Conferences that led to the Hague Conventions in 1899 and 1907; it was taken up again several years later during the 1920s within the League of Nations; and looked at it again in the 1950s when the International Law Commission (ILC) worked on the Rules for Arbitral Procedure. More recently, it was discussed in the Uruguay Round of multilateral negotiations that succeeded in establishing a standing Appellate Body in the World Trade Organization.

However, in the context of investment arbitration, it appears not to have been seriously considered until the turn of this century, but it has now been debated for many years. The unavoidable question, then, is whether there is a need for an appeal mechanism.Chapter 1