Focus: Investment Arbitration

• Langford, Malcolm
• Behn, Daniel

Abstract

Have investment treaty arbitrators responded to the so-called ‘legitimacy crisis’ that has beleaguered the international investment regime in the past decade? There are strong rational choice and discursive-based reasons for thinking that these adjudicators would be responsive to the prevailing ‘stakeholder mood’. However, a competing set of legalistic and attitudinal factors may prevent arbitrators from bending towards the arc of enhanced sociological legitimation. This article draws upon a newly created investment treaty arbitration database to analyse the extent and causes of a shift in treaty-based arbitration outcomes. The evidence is suggestive that arbitrators are conditionally reflexive – sensitive to both negative and positive signals from states, especially influential, developed and vocal states.