From Investors’ Arbitration to Investment Arbitration : A Mechanism for Allowing the Participation of Host State Populations in the Settlement of Investment Conflicts

This paper constitutes the first contribution in a research project on the role of international arbitration in the resolution of social conflicts that derive from investment projects. Some of the issues raised involve matters frequently found in international human rights instruments and draw attention to the role of States and corporations in enforcing these instruments in the investment context. Recent events demonstrate that an adjudication mechanism capable of producing reliable and enforceable results for all stakeholders, including affected populations, may tilt the balance between having and not having certain large-scale infrastructure and natural resource investments. This paper submits that the success of investment treaties is intertwined with the emergence of international arbitration as the preferred mechanism for the resolution of investment disputes and that its underlying rationale applies equally in the case of conflicts that have already arisen, where investment contracts and settlement agreements may submit existing disputes to the institution of international arbitration in a way that allows access to relevant parties. To restore the basic principle that this institution grants reciprocal and not unilateral rights to arbitrate opens the door in the context of international investment law to resolving seemingly intractable investment-related social conflicts. The focus of this initial paper is procedural in nature because this aspect has thus far received little attention from the legal community. Although substantive rights will be the subject of subsequent study, it is the author's belief that the practice that arises from investment contracts and settlement agreements could become the basis for determining which rights will be included in the next generation of investment treaties