Procedural Challenges in Investment Arbitration under the Shadow of the Dual Role of the State: Asymmetries and Tribunals' Duty to Ensure, Pro-actively, the Equality of Arms

Abstract

This article addresses some procedural challenges that arise (primarily) in investment disputes, i.e. treaty-based arbitration against states and which concern special procedural privileges invoked by the respondent state and actions which are specific to a state which may amount to an abuse of its powers and raise a risk for the integrity of the arbitral procedure. It argues that investment treaty arbitration is asymmetrical in nature in that, the treaty states wield disproportionate powers vis-à-vis the private claimants. When deployed inappropriately, such powers can undermine the principle of equality of arms in adjudication. In such a situation, there is a duty on the arbitral tribunal to proactively try to restore the equality of arms affected by abuse of government powers. The key concept that provides substance to fulfil the tribunal's duty to restore the equality of arms is that of inherent powers.