Originally from American Review of International Arbitration - ARIA

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Is there anything left that is sacred? That is, is there anything left which is
considered to be beyond the legitimate purview of arbitration? Traditionally, there
were areas where the interests of the general public were so intricately interwoven
in a dispute that this essentially private form of dispute settlement was considered
inappropriate. However, in the last fifteen years the belief in the non-arbitrability
of these sorts of disputes has slowly faded away, particularly in the United States.
Perhaps one of the last remaining bastions of non-arbitrability is administrative
law and, in particular, the domain of the administrative dispute with the local
official. This is, perhaps, due in part to the very nature of local administrative
laws, such as zoning laws, in that they do not lend themselves to repudiation or
negotiation, but rather set limits that the local official does not have the authority
to compromise. In considering the arbitrability of these claims, the first question
that must therefore be addressed is whether there is any room for the sort of
“compromise” that is inherent in any arbitration proceeding. In this note, I will
provide a justification for answering this question in the affirmative, especially in
developing and transitioning states1 where legal systems are often fraught with the
difficulties which arbitration can help avoid. Using the example of the zoning
dispute with a local administrative official, I also propose that the various extant
Bilateral Investment Treaties (“BITs”) provide the appropriate authorization for