Originally from American Review of International Arbitration (ARIA)

It’s a good word, “uncanny,” and when the students asked me to say something today about what’s happening to investment arbitration, I thought it was also a good place to start this speech.  Because at least some of what’s happening with investment arbitration today is a little strange, and in an unsettling way.

First, there’s the idea, which seems to have taken hold in WGIII, that it is the perceived need for substantive treaty reform that requires and justifies invasive process reform.  My suggestion is that, whatever else you may think about the merits of the case for invasive process reform, we should all be able to agree that that proposition is not sustainable.  If the concern is that treaty obligations have been interpreted in unintended and at times intolerable ways, putting in place a permanent body of some variety is not the right fix for that problem.

Second, even though that central idea in the process reform narrative is un-compelling, some form of invasive process reform seems likely to happen nonetheless, not in the least because there are plenty of other gripes about investment arbitration that the advocates of invasive process reform can deploy to great effect.  And for that we have, at least in part, our own good selves to blame.  The reality is that by not implementing the necessary incremental reforms, we have unwittingly empowered the advocates of invasive reform.

And third and finally, there is the unprecedented confusion afflicting one of the staunchest promoters of invasive process reform: the EU.  In the latest episode of the Achmea saga, the EU and its Member States have declared their intent to instigate judicial decisions that would deprive bona fide award creditors of the benefit of their awards—including, it appears, ICSID awards. Those of us who grew up seeing the EU as a champion of the rule of law and of multilateral rules-based systems are anxious to understand how we will reconcile that most recent initiative with the rule of law and the multilateral enforcement regime of the ICSID Convention.

So, these are the three points that I will briefly address in turn.  I have no sense of how enticing any of this sounds while you’re digesting dessert, so I’ve taken the precaution of easing you into it with a story.