On March 8, 2013, the Honorable Charles Brower offered a vociferous defense of the international commercial arbitration regime in his keynote address, \u201cFrom \u2018Dealing in Virtue\u2019 to \u2018Profiting from Injustice\u2019: Tending Toward the Re-Statification of International Investment Dispute Resolution.\u201d<\/p>\n
Judge Brower has, among other positions, served as a judge of the Iran\u2013United States Claims Tribunal in the Hague, the Netherlands; a Judge Ad Hoc of the Inter-American Court of Human Rights; and as a leading arbitrator.<\/p>\n
Judge Brower began his talk by discussing recent \u201cassassination attempts on the system\u201d of international arbitration. He cited Profiting from Injustice<\/a>, a recent report by the Transnational Institute that is highly critical of international arbitration. Bolivia, Venezuela, and Ecuador have all withdrawn from ICSID; Venezuela has taken the further step of denouncing all bilateral investment treaties (BITs). Australia\u2019s current Labor government, too, has announced that it will no longer enter into treaties providing for international arbitration.<\/p>\n These critics claim that investor\u2013state arbitration is \u201cantithetical to sustainable development\u201d and imperialistic, Judge Brower said. Yet \u201cthe critics are operating totally based on emotion and not on data, not on fact.\u201d<\/p>\n Southern states have signed many BITs between themselves, Judge Brower pointed out, and the terms of those treaties are not much different from those signed with countries in the global north. Moreover, studies suggest that BITs produce investment and are positively correlated with foreign direct investment.<\/p>\n Another criticism of arbitration panels is that arbitrators\u2014\u201cyours truly and others,\u201d as Judge Bower put it\u2014are prejudiced against states. The late President Hugo Ch\u00e1vez of Venezuela claimed in a speech made in early 2012 that ICSID tribunals sided with investors 232 times out of 242 in 2010. But this is not true, Judge Brower argued. ICSID\u2019s own statistics<\/a> [pdf] show that, of all cases decided up until June 30, 2012, investors only won in 48% of cases. In 22% of cases, tribunals declined jurisdiction; they dismissed all claims in 29% of cases; and dismissed claims as manifestly without merit in 1% of cases. Judge Brower mentioned a study<\/a> from 2009 by Susan Franck that came to a similar conclusion.<\/p>\n Judge Brower also responded to critiques of particular cases, noting that \u201cthe fact that someone disagrees with the result does not necessarily mean that it is wrong, let along that it is the result of prejudice.\u201d<\/p>\n Finally, Judge Brower took aim at critics of international investment arbitration who claim that investment treaties limit democracy and the freedom of action in the host state. Treaties, he noted, are an exercise of a state\u2019s sovereignty\u2014\u201cthat is a principle so well established that it is beyond serious doubt\u201d\u2014nor, he said, has he \u201cseen evidence to the effect that governments fail to act because they are afraid of what will happen to them under the treaty.\u201d<\/p>\n What is worse than leaving the system? Tinkering, said Judge Brower. He was particularly critical of proposals to create a sitting appelate tribunal, noting that this may lead to greater politicization as arbitrators jockey for appointment by their states. By contrast, the current system of serving as an international arbitrator \u201cis the highest merit system you can imagine.\u201d He added, \u201cYou\u2019re never better than your last case.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":" On March 8, 2013, the Honorable Charles Brower offered a vociferous defense of the international commercial arbitration regime in his 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