Transparency in investment arbitration, thanks to Vattenfall suing Germany over the nuclear power exit, has become a topic in the mainstream business press. A recent piece in the business weekly Wirtschaftswoche talked about “back room justice” (“Justitia verzieht sich ins Hinterzimmer”), citing the “Toll Collect” arbitration as an example. “Toll Collect” is not technically a case of treaty arbitration, but a multi-billion dispute about a public-private partnership between the German government and Daimler, Telekom und Cofiroute.
And last week, even German public television has picked up the topic – the feature, building on the two Vattenfall actions against Germany, talks about big business attacking legislation it does not like in a manner that is a threat to democracy and big business for a small number of law firms (“Eine Gefahr für die Demokratie – und ein Riesengeschäft für eine überschaubare Zahl von Anwaltskanzleien.”)
Finally, Michael Goldhaber at the AmLaw Daily has a very thoughtful and well-researched article on the topic – the title gives away the key critique: “Arbitration Without Legitimacy”. Investment arbitration, it appears, must do a better job of explaining what it does, and how it does it. Or, to quote Michael Goldhaber: “Without a redesign to enhance its legitimacy, treaty arbitration is always one notorious case away from existential crisis. And notwithstanding its more radical critics, the system is worth saving.”
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