Transnational Investment Arbitration: From Delegation to Constitutionalization?

Abstract

This chapter compares different 'Principal-Agent' (P-A) models of arbitration and adjudication, and then applies them as a means of focusing empirical attention on how investor-State arbitration is, in fact, evolving. There is a familiar traditional distinction between, on the one side, state-centred conceptions of international judges as agents of states with mandates limited by public international law; and, on the other side, private law conceptions of commercial arbitrators settling private disputes on the basis of private contracts. The chapter argues that the arbitral world is being gradually transformed through a process of 'judicialization', which blurs the traditional distinctions and raises important constitutional issues. It illustrates the argument with reference to the increasing recourse to judicial precedents, balancing the review of the 'proportionality' of State restrictions on investors' rights, and to the increasing calls for appellate review of the decisions of investor-state arbitral tribunals.