Part IV Selected Issues for Further Study, D Investment Arbitration, 1 The Challenge of Sovereignty

When legal claims directly implicate public interests, the role of arbitration may be open to question. If challenges to environmental regulations or tax assessments create risks for general community welfare, an argument exists that resolution of such controversies should remain the prerogative of courts, rather than being surrendered to arbitrators. To some extent, societal well-being can be jeopardized by any large arbitration, even if exclusively between private companies. A license dispute between two major pharmaceuticals might result in an award that...