A New Test Toward Consistency in International Investment Arbitration

The issue of inconsistency in international investment arbitration has become more evident with the proliferation of investment disputes. This article analyzes the value as well as the desired extent of consistency and coherence for investment arbitration, and further proposes a new test that would enhance consistency and foster the development of investment law. By matching the current status of investment arbitration with three identified conditions for the application of stare decisis or jurisprudence constante, this article concludes that strictly applying the doctrines to achieve consistency is neither feasible nor favorable for the investment arbitration regime. Further, while the public nature of this dispute-resolution mechanism requires consistency and coherence, existing attempts and approaches in this regard have significant limitations. As such, this article proposes a soft precedents test to reach a balance between consistency and flexibility. The test requires the tribunals to consider previous cases in good faith when facing the same or similar issues discussed therein, and the core consideration in whether to agree with previous cases is to develop international investment law. It is suggested that this proposed test would help to clarify, enrich and develop the content of the law within the investment arbitration community.