International Arbitration: Scapegoat or Solution – Vol. 13 No. 1-4

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Author: Andreas F. Lowenfeld*

Published: December 2003

Arbitrators and Arbitral Tribunals
Categories of Disputes
Commercial Disputes

Description: As the opening speaker in this symposium, I see my task as raising questions and stimulating discussion, rather than preaching or even teaching. I have come with several questions, and some modest suggestions for reform.


First, why is it that at the same time that we see arbitration everywhere — in public, private, and mixed transactions across national boundaries –- international arbitration is now under sharp attack from a variety of quarters? On the other hand, whenever there is a need to create a peaceful means of resolving disputes, arbitration seems to be the instrument of choice.

— When 52 American hostages were detained at the U.S. embassy in Tehran, some $12 billion of Iranian assets in the United States and at American banks overseas were frozen, and billions of dollars in claims of American companies against Iran were pending before U.S. courts. The way out was provided by arbitration — the Iran-U.S. Claims Tribunal built on the model of tripartite arbitration. Indeed the UNCITRAL Arbitration Rules created for private commercial arbitration became the model for the Tribunal at The Hague, and the decisions of that Tribunal have in turn become an important source for the development of international law.

— When the World Bank sought to provide a forum for settlement — and depoliticization — of disputes between investors from developed countries and developing country host states, the model was tripartite arbitration, with the investor and the state each choosing an arbitrator, and a president of the Tribunal chosen by the parties or, if that failed, by ICSID, the International Centre for the Settlement of Investment Disputes established by the World Bank Convention.

— When developed countries, first Germany and subsequently the United States, France, Great Britain, Japan and others sought to regularize — and depoliticize — protection for foreign investors in developing countries through Bilateral Investment Treaties (BITs), they adopted the tripartite arbitration model — based either on the…

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*Herbert and Rose Rubin Professor of International Law, New York University School of Law.