Abstract
Arbitration of international investment disputes is one of the fastest growing areas of international dispute resolution. Investor-State Dispute Settlement (ISDS) is where investors are free to bring arbitration actions in any of the arbitral institutions identified in the treaty, and the host State is required to submit to the jurisdiction of the arbitration institution.Disputes that have arisen are often resolved through the forum of international arbitration, and typically involve claims by an investor company for compensation when an investment has been illegally expropriated or adversely affected by the state's activities.
As discussed in the thesis, arbitral tribunals become increasingly aware of the issue of precedents in investment arbitration. Arbitrators are largely agreed on the consensus to follow earlier arbitral decisions by practicing a kind of de facto case-law system without legal binding obligation. Nevertheless, inconsistent outcome may still be possible given the absence of binding principle and authority. Such disagreement will lead to a state of initiating conflict challenge to the international investment arbitration system.
In recent years, concerns have been raised about the appropriateness of arbitration in light of issues of inconsistency and conflicting awards in investment disputes, as such inconsistency creates uncertainty undermines the legitimacy of the investment arbitration system, and the existence of conflicting decisions threatens the confidence and legal predictability required by international business transactions.
The controversial conflicting rulings observed to be due to the lack of a system of precedent; thus, the coherence and consistency of the case law in international investment arbitration has increasingly become a matter of concern.
The result of arbitral cases that have reached different conclusions concerning the same or similar facts posed a serious challenge to the legitimacy and viability of the BIT regime and the international investment arbitration system.
Noting the distanced interpretation and inconsistent decisions from clauses of the kind that have turned the international investment law into such a controversial situation, it certainly suggests that a consistent mechanism is urgently in call to deal with the challenge. Chapter three thus has been devoted to discuss on the principles of consistency and legitimacy, these principles are deemed the key operational terms for the present discussion. The chapter thus consists of the following sections: a) The principle of legitimacy as a precondition to adherence to and recognition of precedents in the framework of investor-state arbitration; b) The principle of consistency as another prerequisite to the adherence to and recognition of precedents in the framework of investor-state arbitration; c) The viability of consistency in light of the main purpose of bilateral investment treaties and multilateral investment treaties to encourage and protect foreign direct investments; d) The conflict between the principles of consistency and right settlement in the framework of investor-state arbitration; e) The causal nexus between consistency and legitimacy in the framework of investor-state arbitration; f) The peculiarities of investor-state arbitration as a legal system and the role of precedents in this system.
While chapters 4, 5 and 6 have been focused to explore, verify and ascertain the important role and place as well as the significance of precedent in the ICSID investor-state arbitration, the system of NAFTA and in the mechanism of BIT/MIT investor-state arbitration, and to explore possible ways of formalizing the precedent in the existing arbitration systems, and to discuss the formalization of precedent in the framework of investor-state arbitration in general at all. If it is proved that the doctrine of stare decisis is appropriate to the system of IIAs, then it will be necessary to discuss the most pertinent ways in which precedent can be legalized as a source of IIA law.
When the significance of precedent in terms of the system and structure of IIAs is verified, it is then be essential to discuss what model is the most pertinent to the formalization of precedent as a source of IIA law. The study of possible models as well as the justification of the most relevant one will be made through the comprehensive study of legal cases and other international investment jurisprudence.
Methodology adopted in the current research paper including:
1. Doctrinal study: The method of doctrinal study is associated with a doctrinal format of research. On the other hand, the doctrinal format of research means that the scientific procedures are directed at the questions of law on particular issues.
2. Black letter law approach: The method of black letter law approach is based on the concept of ‘black letter law’. The term ‘black letter law’ denotes a common law doctrine. This term originates from the US common law case Jackson ex dem Bradford v Huntington. Stemming from the above case, the method of black letter law approach utilizes a fundamental legal principle that the substantial components of a particular field of law should be regarded as undisputed and free of doubt.
3. Case study (qualitative research): The method of case study is a qualitative research design, which involves the profound investigation of one or several cases.
4. Review: Review is an independent method of theoretical study, which has clearly manifested itself in the chapter dedicated to literature review. The method of review is purposed to provide a familiarization with the existing academic literature.
5. Critique: The method of critique should be regarded as a systematic and progressive exploration of the original constituents of a phenomenon. The method of critique aims primarily at strengths and limitations of the investigated material.
| Date of Award | 20 Jul 2015 |
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| Original language | English |
| Awarding Institution |
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| Supervisor | Avnita LAKHANI (Supervisor), Rajesh SHARMA (Supervisor) & Wei SHEN (Supervisor) |
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