The innovation of investor-state arbitration under NAFTA

摘要

Investor-State arbitration under the North American Free Trade Agreement ("NAFTA") is a subject of considerable interest in recent academic literature, the publications of non-governmental organizations, and the news media. A substantial portion of this discourse centers on the novelty of the arbitration, sometimes depicting it as a startling departure from accepted methods of resolving public disputes. The novelty of NAFTA investor-State arbitration has been overstated. An example may serve to illustrate the issue. Some commentators have characterized NAFTA investor-State arbitration as an "end-run around the Constitution" in that it could "open [final decisions of] the U.S. civil justice system to challenge" under international law. Yet contemporaneous records show that the Framers crafted the Constitution as they did in part precisely because they were aware that domestic decisions were internationally open to question. Defending the Constitution's proposal for a federal judiciary, Alexander Hamilton argued that national courts should have jurisdiction over cases where the nation as a whole could be held internationally responsible: As the denial or perversion of justice by the sentences of courts, as well as in any other manner, is with reason classed among the just causes of war, it will follow that the federal judiciary ought to have cognizance of all causes in which the citizens of other countries are concerned. Thus, far from an "end-run around the Constitution," international claims of denial of justice were anticipated by the Constitution that Hamilton and others crafted. Such misperceptions suggest a need for a more nuanced examination of the novelty of NAFTA investor-State arbitration. The purpose of this Essay is to compare NAFTA investor-State arbitration with its historical antecedents and review precisely what about the institution is old and what is new. The Essay begins with a brief description of the institution, and then considers those elements of the NAFTA arbitration mechanism that have significant precedents as well as those that may be seen as departures. The discussion concludes with a few observations about the innovation of NAFTA investor-State arbitration in light of these elements.