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Discussion or working paper

Investor-state dispute settlement: Are arbitrators biased in favor of claimants?

  • Abstract

    Self-interested and biased arbitrators are often held responsible for the legitimacy crisis of investor-state dispute settlement (ISDS). Based on UNCTAD’s database on ISDS since the late 1990s, we find no compelling evidence that arbitrators are systematically biased. Many disputes are handled by unbiased tribunals, and state-appointed arbitrators are no less pro-state than investor-appointed arbitrators are pro-claimant. Furthermore, even biased tribunals decide more often in favor of respondent states that in favor of private investors. However, it is harder for developing countries, compared to high-income countries, to fend off claims for compensation, in particular when the presidents of arbitration tribunals are biased in favor of private investors.