Virtually all questions of investment law are addressed considering how they have been answered by arbitral tribunals. Therefore, it is arguable that the duties of investment arbitral tribunals are not limited to merely addressing the questions posed to them by the parties, as they address matters for a much broader audience than the parties that includes other states, investors, scholars, NGOs, and the taxpayers of respondent states. All these subjects are stakeholders of investment arbitration, as they all have a tangible interest in how investment treaties are interpreted and applied, and how international investment law is developed. There is, however, no international law instrument vesting investment tribunals with the responsibility to take all these concerns into account when deciding on a claim brought by an investor. This paper is therefore aimed at framing the role and functions of investment arbitrators with regard to stakeholders beyond claimants and respondent.
In recent years, scrutiny of newly signed International Investment Agreements (IIAs) has moved within the jurisdiction of constitutional courts —the term encompasses both national and supranational courts. Here, I explore how Constitutional Courts could use their reviewing power while analyzing new IIAs to define the legal standards that future Investment tribunals must follow to adjudicate investment disputes. I further argue, based on recent cases in Europe and Latin America, that the standards of trust created by courts in the assessment of future IIAs, before they enter into force, are the basis for enhancing judicial dialogue with investment arbitrators. In turn, this dialogue could be one of the pillars for upholding the rule of law during a crisis.
Recent preferential trade and investment agreements have (re)introduced requirements of exhausting local remedies before submitting a claim to investor-state dispute settlement (ISDS). Such is the case of the United States-Mexico-Canada Agreement (USMCA). In its investment chapter, it foresees the obligation to initiate proceedings in national courts before resorting to arbitration. It represents a departure from the preceding North American Free Trade Agreement (NAFTA). At the same time, ISDS between the United States and Canada is gradually phased-out altogether, meaning claims by foreign investors will have to be heard by national courts. These developments could initially be seen as either a renewed trust in national courts, or an increasing distrust of investment tribunals. However, given how the USMCA also includes exceptions to the obligation of exhausting local remedies, it can be argued that a minimum degree of wariness towards national courts prevails.
In order to restore public trust in investor-state arbitration, the European Commission has proposed to establish the Investment Court System, as a stepping stone towards creating a Multilateral Investment Court. The Investment Court System has been incorporated in a number of EU investment treaties, including ones concluded with Singapore, Canada and Vietnam. The mechanism has also been endorsed by the Court of Justice of the European Union. In Opinion 1/17, the Court considered that in the absence of the principle of mutual trust applying between the EU and third countries, investor-state dispute resolution mechanism is necessary to ensure the right to an effective remedy before an independent tribunal for EU investors abroad. This paper evaluates the potential of the Investment Court System to restore trust in public law and its institutions and provide an effective tool for upholding the rule of law.