Article by Richard C. Chen
In response to increasingly harsh critiques, defenders of the investment treaty arbitration (ITA) regime often invoke formalism or its associated virtues to bolster the regime's legitimacy. According to the formalist model, tribunals resolve cases by logically deducing and mechanically applying rigid rules. Investment treaty arbitrators can legitimately wield this authority because they are purportedly neutral actors making decisions based on legal expertise, insulated from policy concerns. Critics have shown how this process has in practice produced an imbalanced jurisprudence, while also highlighting questionable applications of formalist reasoning as to particular issues. But scholars have not yet systematically examined the role that formalism as a mode of reasoning plays in ITA theory and practice.
This Article undertakes that task. Examining the use of formalism in other contexts reveals why it is an appealing but ultimately unsustainable strategy for building legitimacy. That has become evident in the ITA context as concerns about the regime's structural biases can no longer be answered by professions of formal neutrality and projections of expertise. Moreover, the selectivity with which tribunals use formalist reasoning only exacerbates concerns, particularly as tribunals offer no principled explanation for why they sometimes embrace more functionalist approaches. Even setting aside inconsistencies in current practice, there are reasons to doubt that formalism can be put to effective use in ITA given key institutional features such as a scarcity of formal legal sources. Ultimately, those invested in the regime's success will need to look beyond formalism for alternative foundations of legitimacy.
About the Author
Richard C. Chen. Associate Professor of Law, University of Hawai'i at Mānoa, William S. Richardson School of Law.
Citation
99 Tul. L. Rev. 931