The Coming Crisis in the Global Adjudication System

Abstract

IT IS necessary, first, to define the ‘global adjudication system’ in which incipient crisis is perceived. Only then does one address that crisis, and begin to consider whether the title of this article should be punctuated by an exclamation mark, a question mark or an ellipsis. Following that, it falls to consider possible solutions, if any, to the crisis. The global adjudication system is the legal framework within which international investment and other commercial disputes are resolved by binding and final arbitration, as regulated, however, by national legislation and judiciaries; the two components of the system being linked through international agreements, principally the New York Convention.1 As is by now conventional wisdom, this system has greatly expanded in the past decade, thanks in part to the roughly 2,000 bilateral investment treaties now in force around the world,2 as well as some multilateral investment treaties, namely the North American Free Trade Agreement (NAFTA)3 and the European Energy Charter.4 Indeed, it is not too much to say that the pace of expansion has been, by any definition of the word, meteoric. A decade ago, it was noted that the International Chamber of Commerce (ICC) International Court of Arbitration, the then most widely used international arbitration institution, had received in the preceding 12 years (1979–90) the same number of arbitration cases (i.e., 3,500) as it had in the first 55 years of its existence (1923–78).5 Over the ensuing decade (1992–2001), however, the ICC International Court of Arbitration received an additional 4,500 arbitration cases, with 566 of these cases (involving parties from 116 states) coming in 2001 alone.6 New cases received in 2000 by six major arbitral institutions — the American Arbitration Association (AAA), the China International Economic and Trade Arbitration Commission,7 the Hong Kong International Arbitration Centre, the ICC International Court of Arbitration, the London Court of International Arbitration (LCIA) and the Arbitration Institute of the Stockholm Chamber of Commerce — totalled 2,046.8 As these numbers have risen, the cases have become increasingly complex, too, encompassing multiple contracts and hence multiple parties and issues.9

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