Volume 48
Issue 4
Summer '17

Enhancing Standing Panels in Investor-State Arbitration: The Way Forward?

Written By: Leon Trakman


This Article evaluates the perceived value of standing panels in investor-state arbitration (ISA) through a review of literature and a survey of recent investment treaties contained in the Appendix. It considers recent developments, such as the China-Australia Free Trade Agreement (ChAFTA), which establish provisions for an internal standing panel chosen by the state parties. While external standing panels—like those under the Rules of the International Center for the Settlement of Investment Disputes (ICSID)—are often presented as a solution to deficiencies associated with ISA, their development is frequently limited. This Article proposes developing an empirically verified framework to support standing panels in ISA, including the selection of arbitrators for inclusion on panels, their appointment as ISA arbitrators, and the manner in which they reach decisions. It examines the development of in-house standing panels in the ChAFTA compared to external standing panels, such as those under the ICSID Rules, and the ad hoc appointments of arbitrators. It contends that institutional biases in selecting and appointing panelists from both internal and external lists, and decisional biases attributed to arbitrators, are not reasons to avoid relying on standing panels. It proposes that both internal and external panels are often preferable to ad hoc appointments made by disputing parties. It concludes by considering how to address institutional biases in devising an effective structure for standing panels, transparent procedures to regulate the selection and appointment to panels, and the management of those panels.

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