The Role and Relevance of Awards in the Formation, Identification and Evolution of Customary Rules in International Investment Law

Abstract

This article examines the question of the role and relevance of arbitral awards in the formation, development and evolution of customary rules in international investment law. Judicial decisions and arbitral awards are not formal sources of international law. They cannot be considered as evidence of state practice for the formation of customary rules. Yet, while international judges or arbitrators have no formal role in the creation of these rules, they nevertheless play an essential role in “revealing” their existence as well as in their development and evolution. Thus, any decision/award containing a comprehensive and persuasive analysis (based on a detailed examination of both state practice and opinio juris) on whether or not a given rule should be considered as custom will greatly influence other future tribunals as well as the subsequent practice of states. I will observe in this article, however, that arbitral tribunals have so far generally failed in their task of properly revealing the existence of customary rules. Thus, instead of conducting their own analysis of practice and opinio juris, they generally simply rely on the findings of other tribunals.