Part I Investment Treaties and the Settlement of Investment Disputes: The Framework, 4 The Role of Precedent in Investment Treaty Arbitration

Abstract

This chapter examines the role of precedent in investment treaty arbitration. The technical rules of precedent are practice rules developed within legal systems. A system that enforces the rule of precedent requires a supreme court authorised both to impose a rule on inferior courts and to modify it when it sees fit. However, there is nothing like it in the international realm, and even less so in the context of arbitration. Nonetheless, it is possible to imagine the development of an international ‘law on investment protection’ by something akin to the common-law process of developing authoritative rules by case-by-case accretion, though this type of precedent must be qualified by the word ‘persuasive’ rather than ‘binding’.