A weather map for international arbitration: mainly sunny, some cloud, possible thunderstorms

Abstract

This paper offers some broader theoretical perspectives on the already wide-ranging and very thought-provoking keynote speech by Professor Filip De Ly, at the Queen Mary University of London conference in April 2015 celebrating the 30th anniversary of its School of International Arbitration. The paper first focuses on how ‘the sources’ he analyses for 1985-2015, to anticipate the trajectory of international arbitration over the next generation, can be usefully linked to the nature of the ‘general principles’ that Professor De Ly outlines in the second half of his presentation. In particular, it is instructive to consider how the spread of Anglo-American influence may be linked to formalization (including delays and especially costs) in international arbitration principles. To do so and better locate our present position, Part 1 goes back in history to the earlier generation or era of international arbitration, the thirty years prior to the UNCITRAL Model Law of International Commercial Arbitration (1985). A significant portion of cases involved investment disputes with host states, yet the normative paradigm was distinctly more global and informal. Part 2 then takes a closer look at international arbitration’s contemporary and ongoing ‘move East’. It suggests that this new phase of globalization is and will likely remain characterized by ever-growing formalization of international commercial arbitration, due in particular to strong information asymmetries in this market for services.Part 3 develops the counter-intuitive suggestion, however, that treaty-based investor-state arbitration may eventually exert some counterbalancing influence, through the heightened transparency associated with this hybrid form of dispute resolution. Yet investor-state arbitration also risks promoting even greater formalization, and there are serious doubts about the long-term viability of this system of international dispute resolution – including in the Asian region, where there remain some broader historical concerns about foreign investment in general.Part 4 concludes more generally by suggesting that the main theoretical underpinning for international commercial arbitration has settled from the 1980s into a variant of ‘neoclassical’ theory in contract law, with indeed some recent arguments for even greater formalization, in contrast to the theoretical ‘richness of contract law’ described in the US around 1997. Nonetheless, the growth of investment treaty arbitration opens the possibility of more theoretical diversity and therefore debate in the world of international commercial arbitration as well.