Investor State Arbitration: A Force For Good?

L – R : Jay Tseng (King & Wood Mallesons), The Hon Justice Martin Daubney AM (Supreme Court of Queensland), Erika Williams (McCullough Robertson), Marina Kofman, Kristian Maley (Chair, CIArb Australia Young Members Group and CIArb Australia Board Member) and Benjamin Holloway (Jones Day)

When: Tuesday, 19 November 2019 Where: King & Wood Mallesons

As part of Australian Arbitration Week in Brisbane this year, the Chartered Institute of Arbitrators Australia Young Members Group held a fiercely contested debate on the topic ‘Investor-State Arbitration: A Force for Good’?

On 19 November at the offices of King & Wood Mallesons, debaters Jay Tseng (King & Wood Mallesons), Erika Williams (McCullough Robertson) (affirmative), Marina Kofman and Benjamin Holloway (Jones Day) (negative) hoped to convince not only the Hon Justice Martin Daubney AM (Supreme Court of Queensland) as judge of the debate – but the audience at large. Moderator Kristian Maley (Chair, CIArb Australia Young Members Group and CIArb Australia Board Member) welcomed guests and opened a debate that would be equal parts serious and entertaining. The affirmative team argued that ISDS stimulates foreign direct investment – which is good for the many. The audience also heard that the availability of ISDS acts as a trade negotiation tool. Several examples of host State overreach were cited – which has been vindicated through investor-State arbitration.

The negative team echoed Buzzfeed’s criticisms of investorState arbitration. It pointed to the serious flaws manifest in the investor-State arbitration system: a lack of appeal mechanism for public law disputes, the broken system of party appointed arbitrators and a lack of consistent and binding system of arbitrator ethics. The audience heard that this results in incorrectness and inconsistency in jurisprudence and has a significant impact on cost and duration of proceedings: all a focus of the reform efforts now being undertaken in the context of UNCITRAL Working Group III. For the negative team – the cases spoke for themselves: awards many times the size of an initial investment – and often at the expense of critical funds for public services.

His Honour Justice Daubney declared it an equal contest on the vexed question of evaluating the impact of investor-State arbitration. The Debate was organised by Kristian Maley (Chair, CIArb Australia Young Members Group and CIArb Australia Board Member), with the support of hosting sponsor King & Wood Mallesons.