Investment Tribunals as Courts of Appeal? Determining State Responsibility for Substantive Denial of Justice

Abstract The contribution looks into the circumstances under which states can held be responsible for the content of judgments rendered by their courts pursuant to the denial of justice standard. The standard has received increased attention in the context of investor-state arbitration, where it has become widely used as a measure for determining the propriety of judicial conduct. Although ostensibly claimed to concern solely the propriety of judicial procedure, in the practice of investment tribunals, the standard has no less frequently been applied to measure the substantive adequacy of domestic courts’ judgments. The contribution examines this emerging practice by mapping the jurisprudence and evaluating the nature of arbitral tribunals’ scrutiny. It also sets out certain normative considerations that should guide the tribunals’ assessment of whether or not a particular judicial outcome is an adequate one from the standpoint of international standards of administration of justice. The contribution advances three arguments: first, that judicial decisions, as the final product of the domestic adjudicative process, can properly be the object of scrutiny by arbitral tribunals; second, that the task of arbitral tribunals must be limited to determining whether the particular decision is supported by adequate reasoning, and does not extend to inquiring whether the substantive outcome – i.e. the judicial decision on its merits – is also reasonable as such; and third, that the substantive review performed under the denial of justice standard necessarily requires the application of deferential standards of review.