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Chi-Chung Kao

The ICS is intended to improve ISDS with its procedural innovations. But the rules concerning the unilateral appointment of arbitrators by the states are problematic. The presumption that an investor-appointed arbitrator is biased in favour of the appointing investor is proven by empirical statistics as untrue; the allegation that party-appointed commercial arbitrators are not capable of handling claims involving public interest is equally unfounded. In addition, actual cases have demonstrated that the integrity of the arbitral proceedings can be effectively upheld by the challenge mechanism, under which a potentially partial or biased arbitrator can be removed. The deprivation of the investor's right to appoint arbitrator is a disproportionate measure in this regard. Finally, investors might lose their confidence in arbitration if arbitrators are pre-installed by the states. Investors might feel unwilling to have recourse to arbitration and turn to their home state for intervention instead. This could cause a setback in the depoliticization of ISDS. There is nothing fundamentally wrong with the conventional approach of parties appointing arbitrators. The ICS's rules in this regard jeopardize, rather than improve ISDS. If the EU-China BIA does incorporate the ICS, it would be better if the ICS is modified so the disputing parties retain their right to appoint arbitrators.