I am delighted to introduce this TDM Special on Precedent in Investment Arbitration. The role played by precedent in investment arbitration is becoming more widely appreciated as the number of decided cases increases. This makes it easier to comment in an informed manner upon the inter-relationship between various tribunals. This Special arrives at a most appropriate time to digest, review and add to the growing amount of jurisprudence in this area.

To the extent that investment treaty arbitration represents a fusion of the two worlds of international commercial arbitration and public international law, the fact that the awards are treated as having some precedent effect brings about substantive changes in both camps.

Ten years ago, at the 1998 ICCA Congress held in Paris, no sessions at all were dedicated to investment arbitration. The entire programme was devoted to the opportunity afforded by the date of commemorating the 40^th Anniversary of the New York Convention. Even the session entitled "Experience with Bilateral Treaties" was devoted to bilateral treaties on the recognition and enforcement of foreign judgment and arbitral awards. By contrast, in a few weeks when ICCA meets in Dublin, investment arbitration will take up 50% of the programme. The date again affords an opportunity to commemorate a significant anniversary of the New York Convention, yet this opportunity is afforded a half day rather than becoming the full theme of the conference itself.

Anyone spending time at arbitration conferences over the period between 1998 and 2008 will have noticed that investment arbitration has given transnational dispute lawyers a (unique?) opportunity to comment upon, and even create, issues of substantive law. Before the advent of investment arbitration, arbitration conferences did not tend to address questions of English, French or Swiss contract law or other substantive legal issues which were decided in arbitrations. Instead, such conferences were confined to questions of procedural law with the transnational lawyers who were attending taking upon themselves the responsibility to build the framework that would provide the process with international efficacy. In this way, solutions to problems such as arbitrators deciding upon their jurisdiction, multi-party difficulties and choice of law were promulgated, considered and proselytised. Now conferences are often devoted to discussing the substantive legal principles rather than framework procedural issues alone.

The changes for the public international lawyers are also stark. Before investment arbitration, public international lawyers needed only to keep abreast of the glacial turnings of the ICJ docket, as well as a scattered few arbitral awards. Those working to keep up with the economic effects of international law are finding that the jurisprudential wheel is spinning much faster now.

Considering the doctrine of precedent creates an opportunity to stand back and review the legal framework within which this discussion is taking place. There is so much more to say than the simple initial observation that while tribunals are not strictly bound to follow previous decisions, they do so in many instances thereby creating a de facto doctrine of precedent. Indeed, this de facto practice has reached the stage whereby the common law type rules developed by tribunals to fill in the various "gaps" in the generally succinct wording of investment treaties can be digested and set out in legal treatises and become themselves an important part of the law. A few issues, such as the scope of umbrella clauses or the meaning of most favoured nation provisions are not settled. Nonetheless, a far greater number of potentially controversial issues have been. For example, no one today seriously questions whether arbitrations under investment treaties require a separate submission to arbitrate between the parties, even though this was an issue raised by state respondents in early cases and the subject of some scholarly dispute. Similarly, many potentially controversial issues on the meaning of "investment" or the meaning of "national" are being given consistent answers by whichever tribunals discuss them. The power of the informal precedent system results in these solutions being written into the law.

This Special considers precedent from the point of view of decided cases, in comparison with other institutions and from a forward-looking, policy-considering, point of view. I hope that it will itself play a role in the continuing development of substantive principles in this ever-fascinating field.

Lastly, I wish to thanks Thomas Wälde and the OGEL/TDM team for the opportunity to publish this Special, and of course the authors for their excellent contributions.

Matthew Weiniger
Herbert Smith LLP
27 May 2008