Investment Treaty Arbitration and Public Law.

• Author: Shackelford, Scott J.
• Position: Book review

Investment Treaty Arbitration and Public Law. By Gus Van Hagen, Oxford, UK: Oxford University Press, 2007. Pp. xxxii, 214. $110 (hardcover).

For most of the twentieth century, international courts and tribunals rarely enjoyed blanket jurisdiction over foreign nationals. This has changed with the advent of "investment treaty arbitrations." Investment treaty arbitration is a treaty-based regime that uses rules and structures of international law and private arbitration to make governmental choices regarding the regulatory relationship between investors and the state (p. 8). Although tribunals exist around the world, the primary and most public arena for investment-treaty arbitration is the World Bank's Centre for Settlement of Investment Disputes (ICSID). The body has experienced a fourteen-fold spike in arbitrations since the mid-1990s, with cases centering on the former communist block and Latin America.

Unlike international commercial arbitration or inter-state adjudication, investment-treaty arbitration involves at its heart the regulatory conduct of states. It allows, for the first time in world history, for independent tribunals to check sovereigns' regulatory power by installing individualized regimes of state liability for failing to treat investments within certain norms (p. 103). This is not possible in customary international law or in most treaty regimes such as humanitarian or environmental law. States as a general rule are extremely reluctant to delegate to supranational institutions the power to be a check on their regulatory authority. This naturally begs the question as to why states have voluntarily acquiesced to have their sovereignty checked through investment treaty arbitrations. Gus Van Harten attempts to answer this fundamental question in Investment Treaty Arbitration and Public Law, and to assess the essential character and significance of this new system in public international law. (8) His analysis includes four primary parts: a case study demonstrating the core questions of public law that arbitrators now regularly decide, a chronology of the development of investment treaty arbitration, a discussion of why states have assented to the creation of these tribunals, and an explication of why investment-treaty arbitration is such a revolutionary development in international law. These arguments will be addressed in kind, followed by three critiques of the book along with suggestions for reform.

As a vehicle for illustrating the power that investment-treaty arbitrators now have on international finance, law, and relations, Van Harten uses a case study analyzing the aftermath of the Argentine debt crisis. As a result of this economic meltdown and the resulting expropriations, there is currently more than $17 billion at stake in 30 international arbitrations (with damages totaling roughly the total annual GDP of Argentina). (9) Given this dramatic increase in the...