The Judicial Function of Investment Tribunals: Taking Foundational Assumptions Seriously

The proliferation of international courts and tribunals has given rise to debates about the judicial function beyond dispute settlement. These debates provide a broader context to study investment tribunals, especially when various conceptions of their judicial function are articulated in the ongoing reform process at United Nations Commission on International Trade Law Working Group III on investor–state dispute settlement. The current reform debate is largely driven by problems and issues that emerged in the contemporary practice of investment arbitration. However, the original balance that the founders of the system intended to strike receives much less attention. This paper focuses on the founders’ original assumptions about the judicial function of investment tribunals. It addresses the drafting process of selected key institutional features of investment arbitration established by the Convention on the Settlement of Investment Disputes between States and Nationals of Other States. The key claim is that the drafters’ conception of the judicial function was consciously narrow, without carrying major assumptions about public functions. This original view is in marked contrast with certain broader conceptions developed in subsequent arbitral practice. The rationales underpinning the original institutional design choices can also inform the ongoing institutional reform where similar tensions and issues re-emerge.