Arbitrator Behaviour in Asymmetrical Adjudication (Part Two) : An Examination of Hypotheses of Bias in Investment Treaty Arbitration

This article reports on a study of potential systemic bias in the resolution of ambiguous legal issues by investment treaty arbitrators. It outlines tentative but significant findings that the arbitrators in general tended to favour (a) foreign investors over states in general, (b) foreign investors from major Western capital-exporting states over other foreign investors, and, albeit based on more limited data, (c) the U.S. as a respondent state over other respondent states. The evidence is derived from an extensive content analysis of the arbitrators' resolution of 14 legal issues that are contested among arbitrators or in secondary literature. The findings clearly supported initial expectations of systemic bias arising from unique incentives of the arbitrators. Yet the study also has important limitations and there is a range of possible explanations for the findings, some not raising concerns of inappropriate bias. Broadly, the findings lend support to perceptions that the design of investment treaty arbitration does not support fair and independent adjudication of the boundaries of sovereign authority and of disputes involving public funds