Solutions to the Inconsistency of Awards for International Investment Arbitration – Reflections from ICSID Awards against the Argentine Republic

• Main Authors: Po-chen Cheng, 鄭博臣
• Other Authors: Chang-Fa Lo
• Format: Others
• Language: zh-TW
• Published: 2010
• Online Access: http://ndltd.ncl.edu.tw/handle/93655196430652472419

碩士 === 國立臺灣大學 === 法律學研究所 === 98 === The World Trade Organization (WTO) has been in a stalemate ever since Doha Round. Developing countries and developed countries cannot reach a consensus on many issues. Given it is still difficult to see the light from the end of the tunnel, many countries actively started looking for opportunities to sign the Free Trade Agreement (FTAs) or Bilateral Investment Treaties (BITs) in order to promote their economic growth and development. With more and more FTAs and BITs being signed, the number of international investment disputes has been increasing at the same time. However, the development of the legal field of international investment law is basically blank before the 1990s, and thus, arbitrators at the international investment arbitration tribunal have their own ideas concerning application and interpretation of related laws. In addition, most tribunals are ad hoc, and there is no precedent and appellate system in international law. Therefore, it is likely that cases which share similar if not the same circumstances, may lead to different judgments by different tribunals. This situation did happen in reality. Recent arbitration awards against the Argentine Republic are clear examples of this. Argentina adopted a series of administrative measures in order to deal with the economic crisis in 2001, and investors suffered greatly. Consequently, Argentina became the member State which receives the most complaints by investors at the International Centre for Settlement of Investment Disputes (ICSID). Because most arbitrations were handled by ad hoc tribunals, and there was no appellate mechanism to solve the disputes concerning application and interpretation of international investment law, outcomes of arbitral awards differ significantly even though the fact is identical, the legal source or the cited treaty is the same, and only the arbitrators are different. This shows the risk and also the weakness of the international investment dispute system, and weakens related institutions’ authority and legitimacy. Keeping in mind that the importance of inconsistency of arbitral awards in international investment, voices have been raised demanding that the arbitration institutions be reformed, particularly the ICSID given its influence in international investment law. Quite a few people support the idea of establishing appellate mechanism in the system of international investment arbitration. Supporters argue that such a mechanism will thus increase awards’ consistency and predictability. However, to include the appellate body into the WTO, to add into the ICSID system, or to create a Supreme Investment Court (SIC), or to add another chamber under the International Court of Justice (ICJ), requires consent by at least half of the member States. It is necessary to acquire strong political will to deal with a highly controversial issue. However, be it the on-going stalemate between developing and developed countries over Doha Round, or the on-going debates in the academic world, it seems rather difficult to establish the appellate mechanism. In addition, even if it is possible to acquire most countries’ support to create the appellate mechanism, where would the funding come from? Is there enough qualified manpower? What about the prolonged arbitral process that investors have to endure? Therefore, the author believes that is it more practical to first reform within the international investment arbitration system. The author suggests several methods, including the introduction of margin of appreciation doctrine into the arbitral process, expanding the interpretation and application of Article 52 of the ICSID Convention, enhancing transparency of arbitral process, improving the qualification required for arbitrators, consolidating cases with identical facts and issues, and assisting and training developing countries for the international investment arbitration preparations. If the abovementioned measures can be implemented, the author believes that consistency and predictability of arbitral awards in international investment can be effectively enhanced, legitimacy of arbitral awards and authorities of investment arbitration institutions can consequently be enhanced. Such a change may attract more countries to join the system, and realize the possibility of the multilateraliazation of the international investment system.