A DATABASE TO SUPPORT DETAILED ANALYSIS OF INVESTMENT TREATY ARBITRATION

 Investment treaties have become a bugbear for governments and the people they represent.

Their stated and laudable goal has long been to protect investors from unjustified discrimination or abuse in host states. But the treaties have been taken far beyond this advertised purpose into a wild west of international adjudication: forum-shopped claims, creative expansion of standards, disregard for provisions that protect non-investors, highly speculative awards of damages, and aggressive chasing of state assets around the globe.

Essentially, the treaties have been invoked and interpreted very adventurously in favour of big investors, at the expense of most everyone else. Their processes are tainted by institutional bias and secrecy. They have become tools for the wealthy to override national institutions, undermine democratic processes, and intimidate and potentially bankrupt sovereigns.

Although they date to the 1960s, most investment treaties were ratified by states in the 1980s and 1990s. Thus, states submitted to the treaty’s powerful arbitration mechanisms before they had been invoked in actual arbitrations. Until the late 1990s, only a handful of awards emerged from the treaties and those that did were kept quiet among the enterprising lawyers and arbitrators who grew the system in favour of more investor claims.

As I documented in The Trouble with Foreign Investor Protection, in each of the first ten arbitration awards under the treaties, an investor was granted compensation by the state based on creative interpretation of the relevant treaty. It was the product development stage of investment treaty arbitration; the awards communicated to wealthy prospective claimants and their lawyers what the treaties could deliver. The adjudicative field has since become a bonanza.

By now, there is ample basis for states to review their commitment in the treaties based on what has emerged from the arbitration of claims. Options to reform or withdraw from the treaties should be approached with care, informed by what arbitrators have said and done and by the immense monetary risks now made clear for the public.

In this project, a team of researchers will update and refine an extensive database on all known arbitration awards under investment treaties. The database will track who has decided what, when, under what treaty provisions, and based on what interpretations of disputed legal issues. Its information will be disseminated to equip decision-makers – in and outside of government – with highly detailed information about the risks of investment treaties, compared to their actual or perceived benefits.