There is a deafening silence in the MPIA documents published so far about the future status of current AB jurisprudence before the MPIA arbitrators. Since, after all, the MPIA arbitrators will function as an arbitral tribunal, it is essential to consider the role of arbitral jurisprudence in International Investment Law. And here, there is no illusion to be had!
Although decisions by investment treaty arbitral tribunals are not a formal source of law in the strict sense, their subsidiary status in the canon of sources should, however, not disguise the following fact. Arbitral tribunals' pronouncements on the rights and obligations of parties in international investment law, are becoming the principal reference point for understanding the substance of those rights and obligations. In other words, even though arbitral tribunals do not become tired of emphasizing that arbitral precedent is not binding, arbitral precedent becomes the principal reference point to determine the content of International Investment Law.
The statement of the arbitral tribunal in Saipem v Bangladesh is representative of a position that has widely taken hold among investment arbitrators:
The Tribunal considers that it is not bound by previous decisions. At the same time, it is of the opinion that it must pay due consideration to earlier decisions of international tribunals. It believes that, subject to compelling contrary grounds, it has a duty to adopt solutions established in a series of consistent cases. It also believes that, subject to the specifics of a given treaty and of the circumstances of the actual case, it has a duty to seek to contribute to the harmonious development of investment law and thereby to meet the legitimate expectations of the community of States and investors towards certainty of the rule of law. (Saipem SpA v People’s Republic of Bangladesh, ICSID Case No ARB/05/07, Decision on Jurisdiction and Provisional Measures (21 March 2007), para. 67.)
As underlined by Stephan Schill ( ACIL Research Paper 2017-16, available at SSRN), while arbitral precedent does not bind later arbitral tribunals, it shifts the burden of argumentation by demanding a reasoned justification for departing from established precedent. This is because, as stated by another tribunal, ‘it is a fundamental principle of the rule of law that “like cases should be decided alike,” unless a strong reason exists to distinguish the current case from previous ones.’ (Daimler Financial Services AG v Argentine Republic, ICSID Case No ARB/05/1, Award (22 August 2012), para. 52.) This is reminiscent of the "cogent reasons" pronouncement by the WTO Appellate Body!
It seems therefore that MPIA arbitrators will pay lip service to the fact that they are not bound by the previous AB jurisprudence but only by WTO Agreements. This will undoubtedly please the US administration! However, we must expect that in practice, both the arbitrators and the parties would constantly invoke the previous AB jurisprudence.This is what International Investment Law teaches us.
NB: I don't exclude that MPIA arbitrators will take this opportunity to put aside some contested AB jurisprudence, a job that the AB did not want to do itself because it supposedly never makes mistakes. I am thinking here of the AB definition of a "public body" in the context of Article 1/SCM. I would be surprised to see MPIA arbitrators adopting this absurd definition.
