Author: Patrick M. Norton*
Published: December 2014
Description: In the last 25 years the number of investor-state arbitrations has increased dramatically. One of the most striking characteristics of the hundreds of resulting awards is their frequent reliance on the decisions of earlier tribunals to identify rules of international law applicable to foreign investment disputes. This practice has spawned an extensive critical commentary as to whether an international tribunal is permitted or, conversely, obligated to rely on such precedents as authority for its rulings. Several of the tribunals themselves have prefaced their citations with theoretical musings on this issue.
I. THE USE OF PRIOR ARBITRAL DECISIONS IN CONTEMPORARY INVESTOR-STATE ARBITRATIONS
A. Citation of Precedents by International Arbitral Tribunals: A Long-StandingPractice
Citation of precedents from earlier tribunals in support of arbitral awards concerning the treatment of foreign nationals and foreign investment is not new. In the 19th and early 20th centuries, dozens of international arbitration tribunals ruled on state claims based on alleged mistreatment of their nationals, most often to evaluate, under the rubrics of “denial of justice” or failure to observe a “minimum standard of treatment,” a host state’s injury to individual foreign nationals or interference with foreign-owned property or investments. These early tribunals often cited the decisions of their predecessors in support of their own rulings.
*Patrick M. Norton is an independent arbitrator who has practiced with leading international law firms in Washington, D.C., Atlanta, Shanghai, Beijing and London.