by Stephan W. Schill
~ Nov 01, 2011
Numerous critics question the legitimacy of international investment law and investor-state arbitration, arguing that this field of law and dispute resolution presents a threat to foundational principles of domestic public law, including democracy and the rule of law. Many of these critics therefore demand institutional reform, and some states follow suit, by recrafting international investment treaties and restricting investor-state arbitration.
In response to this backlash, this Article proposes to react to the challenges international investment law poses for domestic public law values in a more constructive fashion. Instead of demanding the recrafting of international investment law, or even the abolishment of investor-state arbitration, in order to vindicate public law values, this Article recommends an expansion of public law thinking within the existing structure of investment treaty arbitration itself. To this end, it outlines the conceptual and methodological foundations of a new public law approach to international investment law, which arguably has the potential to enhance the acceptance and legitimacy of international investment law as a whole. The Article suggests that international investment law and investment treaty arbitration should be conceptualized as public law disciplines and integrated into a public law model that transcends territorial borders. Investment treaties should be interpreted, investor-state disputes resolved, and system-internal reform proposed by recourse to public law thinking and a specific public law method, namely comparative public law. Accordingly, problems arising in investment treaty arbitration should not be treated in isolation, but rather by drawing on solutions and concepts adopted in other public law systems at the domestic and international level.