Marquette University Law School International Investment and ADR: Preventing and Managing Investment Treaty Conflict Andrea K. Schneider Professor of Law Marquette University Law School andrea.schneider@marquette.edu

International Systems Regimes/ Factors Direct Effect Standing for Private Actors Supremacy Transparency Enforcement Negotiation No None Optional Investment Arbitration Yes Only as to that award Generally Likely International Adjudication Supreme, but not integrated into domestic law Varying—None (NAFTA) to Retaliation (WTO) Supranational Court Yes, Directly and indirectly Supreme and Integrated Fines & Damages; Domestic Remedies Also

International Systems Investment Arbitration Supranational Court Negotiation Regime International Adjudication Continuum of Constitutionalization Weakest Strongest --Schneider, 1999

Dispute Resolution Process Spectrum Complete Outcome Control No Outcome Control Mediative (Non-Binding) ADR Processes Adjudicative (Binding) ADR Processes Direct Negotiation Trial Facilitative Mediation Bracketed Arbitration Maximum Process Control Minimum Process Control Evaluative Mediation Final Offer Arbitration Early Neutral Evaluation (ENE) Arbitration Mini-Trial Private Judging Med-Arb Bordone, 2008 Copyright 2007 by the President and Fellows of Harvard College. All Rights Reserved

Procedural Justice Explains why international system moved toward courts Explains why domestic alternative dispute resolution took hold

Dispute System Design Contexts Organizational International institutions Nation-States Companies Universities Government Agencies NGOs Non-profits “Transactional” Mass Torts Class Actions Complex disputes Natural disasters Terrorism Repatriation Others? Bordone, 2008 Copyright 2007 by the President and Fellows of Harvard College. All Rights Reserved

Process Design Principles Participation Suitability Process Accountability Results Accountability Fluidity Sustainability Permeability

Process Design—Participation Key stakeholders around the table Stakeholders help design and troubleshoot Funding and support Technical & legal training

Process Design—Suitability Is mediation the correct process? Use of legal defenses Political/domestic constraints Cultural understanding

Process Design— Process Accountability Need education & representation Need group of skilled mediators Transparency of process Follow-up to see how operates

Process Design— Results Accountability Outcomes—transparency issues Repeat players—countries & municipalities Repeat sectors

Process Design—Fluidity Timing—settlement opportunities throughout Adjust process and administration as needed

Process Design—Sustainability Embedded into treaty? New kinds of training and assumptions needed New delegation of settlement responsibilities needed

Process Design—Permeability Part of dispute prevention and management system (Ombuds offices?) Facilitate information exchange Facilitate administrative review

Where Do We Go From Here? Need—and want—shadow of investment arbitration Better structure time between problem arising and arbitration result Can offer process choices between binding arbitration & negotiation DSD is up to the challenge

Marquette University Law School International Investment and ADR: Preventing and Managing Investment Treaty Conflict Andrea K. Schneider Professor of Law Marquette University Law School andrea.schneider@marquette.edu