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The Foundations of International Investment LawBringing Theory into Practice$
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Zachary Douglas, Joost Pauwelyn, and Jorge E. Viñuales

Print publication date: 2014

Print ISBN-13: 9780199685387

Published to Oxford Scholarship Online: August 2014

DOI: 10.1093/acprof:oso/9780199685387.001.0001

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PRINTED FROM OXFORD SCHOLARSHIP ONLINE (oxford.universitypressscholarship.com). (c) Copyright Oxford University Press, 2021. All Rights Reserved. An individual user may print out a PDF of a single chapter of a monograph in OSO for personal use. date: 17 January 2022

Control Mechanisms in International Investment Law

Control Mechanisms in International Investment Law

(p.408) (p.409) 13 Control Mechanisms in International Investment Law
The Foundations of International Investment Law

Anne van Aaken

Oxford University Press

This chapter employs economic contract theory and principal-agent-theory to analyse the mechanisms used by states to control the interpretative practices of arbitrators to whom the resolution of investment disputes is delegated by investment treaties. These mechanisms include: increasing the level of determinacy of the applicable substantive law in the drafting of the investment treaty; prescribing interpretative methods such as the provision of guidance on the relationship between international law and national law in resolving an investment dispute; insisting upon recourse to national courts prior to the submission of the dispute to investment treaty arbitration; introducing more exacting rules for appointing arbitrators and ethical standards for their conduct; establishing institutional mechanisms for the challenge of decisions; issuing authoritative interpretations of treaty provisions; outsourcing certain disputed issues in the context of an investment dispute to technical experts; and exiting the treaty altogether or introducing amendments to its text. The trade-off inherent in any combination of these control mechanisms is that the more intrusive they are, the less credible the state's commitment to investment protection will be and hence the benefits of adherence to an investment treaty may ultimately be undermined.

Keywords:   investment treaty arbitration, arbitrators, international investment agreements, delegation, investment disputes

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