Integrating Investment Treaty Conflict and Dispute Systems Design
By Susan D. Franck. Full text here.
The debate on the renewal of the Trade Promotion Authority Act has brought public scrutiny to the terms of investment treaties—including dispute resolution provisions. In a so-called litigation explosion, investors resolve disputes against host governments through international arbitration mechanisms in investment treaties, and there is little evidence of reliance on other processes like mediation. This escalation has lead to a teething period where parties and nonparties have expressed divergent views as to the efficacy, efficiency, and fairness of the dispute resolution process. With billions of dollars and sovereignty at stake, the dispute resolution system is at a critical historical juncture. In an effort to examine the system’s integrity, this Article describes unexplored synergies between investment treaties and Dispute Systems Design. It considers how systematic design of dispute resolution systems can create more effective conflict management, and it assesses the costs and benefits of such an approach. The Article suggests a new area of scholarship integrating Dispute Systems Design and investment treaties to create dispute resolution mechanisms that will maximize the success and legitimacy of investment treaty conflict resolution.