Responding to Incorrect Decision-Making in Investor-State Dispute Settlement: Policy Options

Abstract

Criticism of the quality of investor-State dispute settlement (ISDS) decision-making often focuses on inconsistency (comparing ISDS decisions), and less frequently, incorrectness (evaluating individual ISDS decisions on a standalone basis). This article situates incorrect ISDS decision-making within the broader context of public international law and develops potential policy responses, guided by three considerations. First, criticism of ISDS decision-making has been significant. Second, criticism of particular ISDS decisions, even when widespread and intense, does not necessarily establish their incorrectness. Finally, development of policy options should be informed by a broad understanding of 'incorrectness', to include instances of questionable legal analysis that cast doubt on the reliability of ISDS legal conclusions and outcomes; that approach can support not only the avoidance of incorrect ISDS decision-making in a strict sense, but also, more expansively, the achievement of correct ISDS decision-making, consisting of two core elements: Correct identification and precise application of applicable law.