This paper explores the significant yet complex role of precedent in international investment law, particularly in the context of IP-related investment disputes. Despite the binding nature of awards being limited to the disputing parties, the reliance on prior case law for authoritative arguments is paramount in practice. The absence of a hierarchy between tribunals or an appeal mechanism raises concerns about the doctrinal basis for using previous awards as precedents.
The scarcity of case law in IP-related investment disputes, coupled with the influential nature of older cases, underscores the necessity of understanding the informal system of precedent in this field. Recent studies indicate that even new treaty language is sometimes overlooked in favor of interpretations based on older treaties, posing significant implications for IP-related disputes. The specific wording in treaties can substantially impact legal assessments, from jurisdictional questions to the merits of the case, but not when those are read down in light of a misguided understanding of precedent in investment arbitration.
This paper aims to critically reflect on the existing practice of investment arbitration as regards the precedential value of their decisions. It also examines the doctrine of sources of international law and considers the initial findings of the International Law Commission’s study on subsidiary means for determining rules of international law. The paper then offers a unique socio-legal framework within which the interpretive process of legal decision-making in investment arbitration is scrutinized.