The Limits of Depoliticisation in Contemporary Investor-State Arbitration

Abstract

Depoliticisation of investment dispute settlement is considered to be one of the principal reasons and advantages of investor-State arbitrations. This paper considers the added value that the depoliticisation vocabulary brings to the resolution of modern challenges.

First of all, equating investor-State arbitration with depoliticisation of investment disputes suggests a particular perception of legal and political. For the drafters of the ICSID Convention, ratione personae identity of the claimant was the benchmark of politicisation. The logical solution was to replace the home State with the investment, leaving the dispute otherwise unchanged. Secondly, one critique of investment arbitration questions its adequacy for resolving public disputes. In terms of depoliticisation, despite the ratione personae changes the ratione materiae nature of the dispute retains the same degree of political sensitivity. While this position is open the classic Lauterpacht’s critique of substantive definitions of political, it also shows the danger of promising depoliticisation by legal means. Thirdly, another challenge to depoliticisation is the involvement of the home State, eg by ownership or control of the investor. While the de facto involvement of the home State blurs the distinction from the classic regime, restrictions could lead to direct challenges of depoliticisation by invocation of the State-State dispute settlement.

Overall, as per Lauterpacht, it has to be taken as a given that every international law dispute is political. Whatever usefulness depoliticisation may have had as a rhetorical tool in contrasting ‘retrogressive State-centred political’ law with ‘progressive investor-centred legal’ law, its contribution to conceptualising and resolving modern challenges is not entirely obvious.

Keywords: Investment Protection, Investor-State Arbitration, Depoliticisation

JEL Classification: F02, F10, F13, F14, F15, K33