Investment Treaty Arbitration as a Species of Global Administrative Law

TLDR

International investment arbitration under regional and bilateral investment treaties exemplifies global administrative law, yet this has not been fully recognized. The authors aim to demonstrate that investment arbitration is a clear example of global administrative law. They do so by explicating four key features of investment treaties: allowing investor claims against states without exhausting local remedies, permitting claims for damages, enabling direct enforcement of awards before domestic courts, and facilitating forum‑shopping. The authors conclude that investment arbitration, through its unique features, subjects state regulatory conduct to compulsory international adjudication and is best understood as a powerful manifestation of global administrative law, closely linked to domestic legal systems and analogous to domestic.

Abstract

The article outlines a simple thesis: that international investment arbitration – pursuant to regional and bilateral investment treaties – offers the clearest example of global administrative law, strictly construed, yet to have emerged. We present this thesis by explicating four key features of investment treaties: they permit investor claims against the state without exhausting local remedies; they allow claims for damages; they allow investors to directly seek enforcement of awards before domestic courts; and they facilitate forum-shopping. Our argument is that, owing to this unique conjunction of features, the regulatory conduct of states is, to an unusual extent, subject to control through compulsory international adjudication. Having highlighted these features, we then claim that investment arbitration is best analogized to domestic administrative law rather than to international commercial arbitration, especially since investment arbitration engages disputes arising from the exercise of public authority by the state as opposed to private acts of the state. Further, we claim that the linkages between investment arbitration and domestic legal systems are more direct and more closely integrated than other forms of international adjudication in the public sphere. For these reasons, we argue that the emerging regime of investment arbitration is to be understood as constituting an important and powerful manifestation of global administrative law.