International Investment and ADR Preventing and Managing Investment

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

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

Dispute Resolution Process Spectrum Complete Outcome Control Direct Negotiation Maximum Process Control Mediative (Non-Binding) ADR Processes Adjudicative (Binding) ADR Processes No Outcome Control Trial Facilitative Mediation Evaluative Mediation Bracketed Arbitration Minimum Process Control Final Offer Arbitration Early Neutral Evaluation (ENE) Arbitration Private Judging Mini-Trial Med-Arb Bordone, 2008

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

Dispute System Design Contexts Organizational “Transactional” International institutions Nation-States Companies Universities Government Agencies NGOs Non-profits Mass Torts Class Actions Complex disputes Natural disasters Terrorism Repatriation Others? Bordone, 2008

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

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