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10 Manchester J. Int'l Econ. L. 382 (2013)
Legitimacy Challenges in Investor-State Arbitration Interpretive Principles: Reflecting on a Balancing Tool

handle is hein.journals/mjiel10 and id is 400 raw text is: Manchester Journal of International Economic Law
Volume 10, Issue 3: 382-401, 2013
Legitimacy Challenges in Investor-State Arbitration Interpretative
Principles: Reflecting on a Balancing Tool
Collins C. Ajibo*
ABSTRACT: Developing a coherent and consistent interpretative paradigm for the procedural
settlement of investment disputes has been a continuing conundrum that underpins the current
International Centre for the Settlement of Investment Disputes (ICSID)' legitimacy crisis. The
article intends to extend this private-public debate further by reflecting on a balancing doctrine.
Although various interpretative doctrines have been adopted including lately the proportionality
doctrine, none has succeeded in embedding equitable balance between the contracting parties in
matters of regulatory imperatives of the host state. Consequently, it is the contention of this article
that such requisite balancing of interests could embed if the ICSID could take a cue from the
jurisprudence of European Court of Human Rights (ECHR) by adopting the theoretical premise of
the margin of appreciation doctrine.
1. INTRODUCTION
Investor state arbitration under the auspices of International Centre for the Settlement of
Investment Disputes (ICSID)2 is a platform established under the tutelage of International
Bank for the Reconstruction and Development (otherwise known as the World Bank) to
provide facilities for the conciliation and arbitration of investment disputes between
Contracting states and the national of other Contracting states in accordance with the
provisions of the ICSID Convention.3 The institutional philosophy underpinning its inception
is to foster international economic cooperation through the flow of private foreign investment
* LLB, LLM Manchester (Distinction), Doctoral Candidate, School of Law, University of Manchester, United
Kingdom. The author would like to thank Dr Yenkong Ngangjoh Hodu and Professor Asif Qureshi for the useful
observations made on the earlier draft of this article. However, the author accepts responsibility for any errors
herein.
See International Centre for Settlement of Investment Disputes, Washington D.C., (adopted 18 March 1965,
entered into force 14 October 1966 <https://icsid.worldbank.org/ICSID/StaticFiles/basicdoc-en-archive/ICSIDEn
glish.pdf> accessed 10 February 2013.
2 Note that investor-state arbitrations could span into wide spectrum arbitral frameworks and institutions
particularly United Nations Commission on International Trade Law (UNCITRAL), International Chamber of
Commerce (ICC); London Court of International Arbitration (LCIA), among others. However this discourse will
concentrate only on ICSID arbitration owing to the fact that it occupies a strategic position in investor-state
disputes settlement that far outweighs others.
3 See article 1(2) of ICSID Convention.

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