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The backlash against investment arbitration


Jeffrey Sullivan, Counsel, and Alexis Martinez, Associate, of Allen & Overy LLP London contributed to "The Backlash against Investment Arbitration - Perceptions and Reality", Kluwer Law International (2010), a volume which assesses whether the current investment arbitration regime is in crisis. Claire Balchin, also of Allen & Overy LLP, is one of the co-editors of the book.  Contributors to the volume took a step back to look at the long term prospects of investment arbitration, focusing on the reforms that may bring substantial improvements to the investment arbitration process.

Jeffrey Sullivan contributed "A Comparison of ICSID and UNCITRAL Arbitration: Areas of Divergence and Concern", a detailed comparison and assessment of the two principal investment arbitration processes. They explain how these systems are similar on many levels but also diverge in fundamental areas. A careful analysis of the advantages and disadvantages of both systems should be undertaken prior to choosing one of these systems. They also find that many of the criticisms levelled at these systems can be addressed within each system, as they both provide a flexible set of rules. In many instances the concerns can be remedied by agreement. If agreement is not possible, tribunals are given sufficient leeway under both systems to address these concerns.

Alexis Martinez wrote "Invoking State Defenses in Investment Treaty Arbitration", a review of the four most commonly invoked state defenses: force majeure, necessity, bribery, and legitimate exercise of sovereignty. He finds that while States invoked these defenses increasingly, if not systematically, most tribunals follow a strict approach. He also finds that these defenses are nevertheless increasingly successful.

"The Backlash Against Investment Arbitration"; Michael Waibel, Asha Kaushal, Kyo-Hwa Chung, Claire Balchin (eds), Kluwer Law International (2010)

For more information contact Andrea Dahlberg at




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