Is Investment Arbitration an Effective Alternative to Court Litigation? Towards a Smart Mix of Litigation and Arbitration in Resolving Investment Disputes

This article analyzes litigation and arbitration as commonly used methods for dispute resolution, more particularly between foreign investors and host states. It compares investor-state dispute settlement (ISDS) via investor-state arbitration with dispute resolution via domestic courts in the host state. The article adopts a goal-based approach for assessing the effectiveness of international adjudication and analyzes the extent to which the current ISDS system is aligned with its predetermined goals. The article starts by identifying four goals of ISDS: 1) fair and efficient dispute resolution, 2) norm compliance, 3) facilitating the objectives of the investment law regime, and 4) legitimizing the investment treaty regime. The identification process is followed by an examination of the extent to which ISA in its current form is able to serve these goals. In this regard, the paper examines systematically the traditional theoretical assumptions underlying the goals of ISDS as well as the assumptions on the basis of which ISA is often advanced to reach those particular goals. For every separate topic, a reality check is performed to verify the extent to which ISA is able to reach the expressed goals in practice. The analysis of each of the four goals concludes with a summary where the strengths and weaknesses of ISA are compared to the functioning of domestic courts. Finally, the article comes to nuanced conclusions pointing at the complicated reality concerning the dynamics between investment tribunals and domestic courts, arguing that investment arbitration does have its unique advantages over domestic courts in advancing the goals of ISDS, but that for some aspects (such as awarding primary remedies) domestic courts may have particular advantages as well. It is for this reason that this article argues for a refined smart mix of court litigation and investment arbitration as an updated form of ISDS, allowing for example foreign investors to proceed to investment arbitration should court proceedings fail to resolve investment disputes. The unique and innovative character of the paper therefore consists of taking a different approach than the traditional one where investment arbitration and court litigation are often opposed. The article argues in favor of a smart mix of both systems by relying on a goal-based approach focusing on which smart mix of investment arbitration and court litigation could constitute an ideal institutional choice to meet the expected goals of ISDS

Investor-State Arbitration: Economic and Empirical Perspectives

The investor-state arbitration system (“ISA”) was originally modelled on traditional commercial arbitration and was expected to deliver fast, good, and cheap decisions, especially in comparison to domestic court systems. Yet the ISA system has increasingly been criticized, especially by developing countries. Developing countries claim that the system is not cheap, that decision-making increasingly takes a long time, and that arbitrators are biased in favor of investors (often coming from developed countries in the global North) and against states from the developing South. Several developing states have even withdrawn from the ICSID Convention, which governs the settlement of disputes between investors and states through the institution of the same name. This article provides an economic and an empirical perspective on ISA: It reviews the traditional Law and Economics arguments in favor of and against international commercial arbitration, analyzing to what extent the characteristics of ISA make ISA different than international commercial arbitration. Moreover, the article summarizes the rich empirical literature on the functioning of ISA, and it compares and synthesizes this empirical literature with Law and Economics theories. Based on both Law and Economics and the empirical literature, the article then analyzes existing suggestions for reforming the ISA system

A Comparative Study of Carbon Pricing Policies in China and the Scandinavian Countries: Lessons for Effective Climate Change Mitigation with a Focus on Sweden

Under the Paris Agreement's goal of limiting global warming to 1.5 degrees by 2100, nations are taking steps to reduce carbon emissions. Carbon pricing is a popular policy instrument to mitigate carbon emissions. This paper presents a comparative analysis of carbon pricing policies in China and Scandinavian countries (Norway, Denmark, and Sweden), focusing on their impacts on the transportation, industrial, and building sectors. The study highlights that both regions have successfully implemented carbon pricing policies, combining carbon taxes with emissions trading systems, resulting in significant emissions reductions and decoupling of economic growth from greenhouse gas emissions. In the transportation sector, carbon pricing policies have driven the adoption of electric vehicles and cleaner fuels. In the industrial sector, these policies have led to investments in energy efficiency, fuel switching, and low-carbon technologies. In the building sector, carbon pricing has encouraged energy efficiency improvements and the adoption of low-carbon heating technologies. The paper underscores the importance of integrating carbon pricing policies with other energy and environmental policies, fostering public engagement, and designing robust monitoring, reporting, and verification systems to ensure their effectiveness in promoting low-carbon development