Some Comments on Recent Proposals to Legitimize Investment Treaty Arbitration by Improving the Quality of Reasoning in Arbitral Awards

This paper explores some key issues arising from so-called system-internal reform proposals – proposals which aim to (partly) answer investment law’s legitimacy crisis by influencing changes in arbitral reasoning so that investment arbitration is undertaken in more acceptable ways. To be clear, I agree that there will be a need for system-internal reform in addition to whatever wider changes may occur to the contemporary investment regime. This reflects that a large-number of ‘old-style’ investment agreements will remain in force and need to be applied in acceptable ways. My aim in raising the following questions is to strengthen internal-reform proposals and also highlight some of their limits. After some initial, general remarks regarding what can be expected of legal reasoning, the paper has two main parts. First I argue that certain doctrinal techniques drawn upon by internal-reform authors – such as such interpretation according to the VCLT provisions or the extraction of general principles and their in interpreting treaties – are themselves highly contested methodologies which seem likely to lead to further questions and disagreement, rather than a situation where losing or other interested parties are convinced by the quality of legal reasoning deployed in awards. Second, I argue that implicit in internal-reform proposals is a crucial and controversial question of who arbitral reasoning should be more persuasive to, and that while well-known disagreements persist over the relevant audience for investment arbitration, the task of building widely-perceived legitimacy through arbitral reasoning will remain difficult.