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The Role of the State and the ISDS Trinity

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In their article Imperfect Alternatives: Institutional Choice and Reform of Investment Law, Sergio Puig and Gregory Shaffer develop a clear and discerning comparative framework to evaluate alternatives to the current system of investor-state dispute settlement (ISDS). In her essay Incremental, Systemic, and Paradigmatic Reform of Investor-State Arbitration, Anthea Roberts offers us a bracingly candid typology to describe the various actors involved in the recent efforts toward reform. My essay is meant to complement these excellent contributions and to focus unflinchingly on the tripartite role of the state itself. What I call the ISDS Trinity can be understood as shorthand for the state's systemic role as (1) law-giver, (2) protector of investment, and (3) respondent. Looking at current and future design trade-offs, I suggest that whether an institutional choice is embraced within the ISDS system has a lot to do with how well the reform validates each of these three roles. In this way, the ISDS Trinity offers further insight into how each state will approach the various trade-offs and intercamp dynamics described by Puig and Shaffer, and by Roberts, within the current debate. Put another way, the ISDS Trinity sheds additional light on whether a reform to the system will be well-received by a state and thus enjoy a greater chance of adoption.

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References
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1 Sergio Puig & Gregory Shaffer, Imperfect Alternatives: Institutional Choice and the Reform of Investment Law, 112 AJIL 361 (2018).

3 Rep. of UN Comm'n on Int'l Trade Law of its Fiftieth Session, UN Doc. A/72/17, paras. 260–64 (2017).

5 Sylvia Constain, ISDS Growing Pains and Responsible Adulthood, 11 Transnat'l Disp. Mgmt. 1, 1 (2014).

6 See, e.g., Won Kidane, Alternatives to Investor-State Dispute Settlement: An African Perspective (GEGAfrica Discussion Paper, Jan. 2018).

7 The role of the state in investment arbitration has long been the subject of many excellent works of scholarship. Without necessarily aligning myself with the views expressed therein one way or another, perhaps one of the best is Anthea Roberts, Power and Persuasion in Investment Treaty Interpretation: The Dual Role of States, 104 AJIL 179 (2010).

8 See, e.g., Puig & Shaffer, supra note 1, at 376 (“In our view, the rule of law provides the guiding principle for international investment law.”).

9 Id. at 380.

10 Id. at 408.

11 Id. at 409.

12 I expand upon this example in a forthcoming article. See Patrick Pearsall, The ISDS Trinity and Early State Practice in Investor-State Arbitration (ICCA Congress Series No. 20, forthcoming 2018).

13 Sophie Lamb et al., Recent Development in the Law and Practice of Amicus Briefs in Investor-State Arbitration, 5 Indian J. Arb. L. 72, 87 n. 72 (2017) (noting that “[t]he ratio of tribunal decisions on amicus applications to cases registered with ICSID was approximately 1:6 in 2015 and 1:7 in 2016 (January to September)” and that these ratios “stood at 1:31 in 2001 and 1:23 in 2006 (ICSID tribunals did not make any decisions on amicus applications between 2002 and 2005)”).

14 Methanex Corporation v. U.S., Petition to the Arbitral Tribunal by the International Institute for Sustainable Development para. 1.1 (NAFTA/UNCITRAL, Aug. 25, 2000).

15 Id. at paras. 3.1-3.3.

17 Methanex Corporation v. U.S., Statement of Respondent United States of America Regarding Petition for Amicus Curiae Status (NAFTA/UNCITRAL, Oct. 27, 2000) [hereinafter Methanex Corporation v. U.S., Respondent Statement].

18 Methanex Corporation v. U.S., Mexico's Submission in Response to Application for Amicus Standing (NAFTA/UNCITRAL, Nov. 10, 2000) [hereinafter Methanex Corporation v. U.S., Mexico's Submission]; Methanex Corporation v. U.S., Submission of the Government of Canada (NAFTA/UNCITRAL, Nov. 10, 2000) [hereinafter Methanex Corporation v. U.S., Canada's Submission].

19 Methanex v. U.S., Respondent Statement, supra note 17, at 4-5.

20 Puig & Shaffer, supra note 1, at 409.

21 Methanex Corporation v. U.S., Mexico's Submission, supra note 18, at para. 13.

22 Methanex Corporation v. U.S., Canada's Submission, supra note 18, at para. 4.

23 North American Free Trade Agreement art. 2001(2), Dec. 17, 1992, 32 ILM 289; Gabrielle Kaufmann-Kohler, Interpretive Powers of the Free Trade Commission and the Rule of Law, in Fifteen Years of NAFTA Chapter 11 Arbitrations 175 (Emmanuel Gaillard ed., 2011).

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