New Research Considers Impact of Investment Disputes on Developing World

Lexington, VA Thursday, July 09, 2009


Susan D. Franck

Global Arbitration Review, a leading journal focused on international public and private arbitration, featured research by Washington and Lee law professor Susan Franck in a recent article examining potential bias against developing nations in investment treaty arbitration. The article, titled "Arbitration fair on developing countries, says new research," is available to registered members of the Global Arbitration Review website.

In her research, which will be published in the Harvard International Law Journal later this summer, Franck examined a sample of arbitration awards looking for a statistically significant link between the development status of the respondent, the presiding arbitrator's background, and the outcome of the arbitration.  Franck found no evidence of bias with regards to the development status of a respondent state, the presiding arbitrator's home country, and whether the state wins or loses at arbitration.

"The consistency in these results offers a powerful narrative that there is procedural integrity in investment arbitration," Franck told Global Arbitration Review.

Other international investment scholars have been uniform in their praise of Franck's research and findings. Catherine Rogers of Penn State's Dickinson School of Law told Global Arbitration Review that Franck's research "is very significant because many of the claims of unfairness are based on anecdotal accounts and subjective perceptions. While these accounts and perceptions are important to consider, they also need to be measured against a more objective yardstick, both so that they can be corrected when inaccurate and so that the real sources of concern among developing countries can be identified and redressed."

Franck's findings appear in Development and Outcomes of Investment Treaty Arbitration and are available online. Earlier this year, she presented expert evidence on this topic at the United Nations Conference on Trade and Development (UNCTAD) in Geneva, Switzerland. She will also blog about investment disputes for the online symposium "The Future of Law and Development."

Susan D. Franck is an associate professor at Washington and Lee University School of Law and an expert in international economic law and dispute resolution.  She was recently invited to serve as co-chair of the American Society of International Law's (ASIL) International Economic Law Interest Group.

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