Independence and impartiality of arbitrators: A Rule of Law analysis

• Main Author: SCHACHERER, Stefanie
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2018
• Subjects: Foreign investment; trade laws; rule of law; investment disputes; Dispute Resolution and Arbitration; International Trade Law
• Online Access: https://ink.library.smu.edu.sg/sol_research/3949; https://ink.library.smu.edu.sg/context/sol_research/article/5907/viewcontent/Schacherer_2018_Independence_Impartiality_Arbitrators.pdf
• Institution: Singapore Management University

Investor-State dispute settlement (ISDS) through arbitration remains in a state of legitimacy crisis and discussions on reform are ongoing. Much of the criticism is focussed on who is deciding investment dispute cases. Investment arbitrators have been called “private judges” who operate in secrecy, are biased in favour of big multinational companies and have no regard for conflicts of interest. The course of the negotiations on the Transatlantic Trade and Investment Partnership between the European Union (EU) and the United States, highlighted to what extent ISDS through arbitration is perceived as unfair and biased (at least in Europe). As a reaction to the general concerns to ISDS, EU Trade Commissioner Malmström stated in a blog post: “I want the rule of law, not the rule of lawyers”. The statement might be somewhat exaggerated as it assumes that the international investment regime is governed by lawyers and arbitrators and not by States. Yet it points to a crucial legal question, which is whether the current system of international investment arbitration meets the requirements of the rule of law? The rule of law is a key legal and constitutional principle in the majority of States. According to a definition of the United Nations (UN), central aspects of the rule of law are i.a. equality before the law, accountability to the law, fairness in the application of the law, participation in decision-making, legal certainty, avoidance of arbitrariness and procedural and legal transparency. One important procedural aspect of the rule of law is the independent administration of justice. This implies that adjudicators must exercise their adjudicative function in an independent and impartial manner. If concerns arise with respect to the independence and impartiality of adjudicators, it automatically poses a challenge to the rule of law.