The virtue-based paradigm of judgment in the world of investment disputes

Abstract

International investment arbitration is undeniably one of the main justice mechanisms provided in the system of international investment. The issue of the role of international investment arbitrators and how they function in the course of investment disputes are therefore significant. To a great extent, the function of international investment arbitrators is bound by the influence of party autonomy. Despite such an influence, the role of party autonomy relies heavily on the function of arbitrators. Hence, the paradigm of justice in the system of international investment arbitration should be the one in which the significance of party autonomy and adjudicators’ practical wisdom are given equal emphasis, for they are the values which should work synergistically. It could be said that the credibility and legitimacy of international investment arbitration after all depend on the synergy of these two values. Practical wisdom is the primary virtue which guides the adjudicator to make the right and just decision. Despite such significance, however, the role of practical wisdom in the current practice of international investment arbitration could only be found randomly, not systemically. What the current system of the adjudication of investment disputes needs is therefore the framework to understand, interpret and utilize the role of practical wisdom. In this regard, Aristotle’s concept of mean (as a part of virtue ethics theories) and Buddhist concept of compassion could facilitate the establishment of such a framework. The establishment of such virtue-based framework could potentially increase the credibility of international investment arbitration, for it is a potential means to reduce the gap of interests between the winning and losing party, and promote the good understanding among the users of the system of international investment arbitration.