Thammasat University students interested in law, economics, business, and related subjects may find it useful to participate in a free 16 February Zoom webinar on Re-Imagining International Monetary and Financial Law.

The event, on Friday, 16 February 2024 at 8pm Bangkok time, is presented by the Lauterpacht Centre for International Law, University of Cambridge, The United Kingdom.

The TU Library collection includes several books about different aspects of international monetary and financial law.

Students are invited to register at this link:

https://zoom.us/webinar/register/WN_mvJYogFURWq3Lx9IhkBTvw#/

The event webpage announces:

Lecture summary: This lecture considers what Josef Kunz termed “swings of the pendulum” in international monetary and financial law and the formal and informal institutions in these related fields. International monetary law exploded in importance after the Second World War with the creation of the International Monetary Fund (IMF) and a global system of managed exchange rates. With the collapse of the Bretton Woods system in 1971 and a decline in capital controls, the IMF evolved from a dominant institution into a peer of central banks and private markets, providing surveillance of the “non-system” of floating exchange rates and assisting in responses to financial crises.

By contrast, international financial law, which was of limited importance during the Bretton Woods era, has become a major soft law force in the global financial sector since the Basel Committee on Banking Supervision was created in 1974. The dichotomy between profit maximization and systemic risk at the core of global finance today is overseen and guided by the technocrats of the Basel Committee, the Financial Stability Board and other institutions of international financial law.

Today, the pendulums of international monetary and financial law may be reversing again. Armed conflict, rising authoritarianism, growing fragmentation of the global financial system, and a revival of capital controls and other restrictions on capital flows could reinvigorate international monetary law and the IMF. This institution has reimagined itself multiple times already while staying true to its original mandate of safeguarding monetary stability.

The speaker will be Professor Michael Waibel, who teaches international law at the University of Vienna, Austria.

The event chair will be Dr. Markus Gehring, Associate Professor at the Faculty of Law, University of Cambridge.

In 2017, Professor Waibel coauthored an article, Are Arbitrators Political? Evidence from International Investment Arbitration.

Here is the abstract for the article:

This paper examines the role of arbitrator background for outcomes in arbitration between foreign investors and the host states. We construct a unique personnel data set of more than 500 arbitrators who have been appointed to adjudicate investment disputes before the International Centre for the Settlement of Investment Disputes (ICSID). Among presiding arbitrators appointed by ICSID and arbitrators whose votes are revealed, we find that the tribunal decisions are weakly correlated with an external measure of legal strength but strongly correlated with arbitrators’ policy preferences. When the presiding arbitrators’ policy preferences are closer to those of the arbitrators one party frequently appoints, the tribunal decisions bias toward that party. Among the “bias” factors, an arbitrator’s developing status is most prominent. We also show that a standing tribunal may give greater room for arbitrators to bring their policy preferences to bear on disputes before them.

This is part of the paper’s conclusion:

Who the parties select as arbitrators is important for how the investment treaty tribunals

operate and for the investment treaty regime’s legitimacy. The selection procedure matters because it may encourage the appointment of biased arbitrators without such bias amounting to a challengeable conflict of interest – the focus of this paper. Arbitrators may also be subject to a series of incentives – financial and because of other roles that they assume in the investment treaty regime.

The traditional, formalistic view of international arbitration overlooks the important role of arbitrator background and socialization. Arbitrators may fill ambiguities and gaps in such an evolving legal field such as international investment law based in part on their policy preferences. As human beings, they bring policy preferences, their education, career background and their life experience to these arbitrations.

Our empirical analysis shows three main results. First, we find that arbitrators’ policy views appear to influence their decisions, at least, in some cases, and that hence arbitrators do not simply apply the law as it stands when deciding investment disputes. When personal characteristics exhibit a strong correlation with decision outcomes, the correlation between a case’s legal strength and its arbitral decision is significantly weaker. Second, among arbitrator personal characteristics, policy preferences outweigh incentives in their impact on arbitral decisions. This finding rejects the popular critique that international investment arbitration biases toward one party, particularly investors, because arbitrators wear multiple hats and are driven by incentives.  […] Third, we find that when a presiding arbitrator is closer to one disputing party in terms of a set of personal characteristics, he or she is more likely to bias toward that party. But the characteristics that may cause decision bias are not those selected by the disputing parties when they choose their own arbitrators but are mostly related to arbitrators’ policy preferences.

The Canada-EU Free Trade Agreement (CETA 2016) establishes a standing investment tribunal for this particular trade and investment agreement, in response to strong criticism of traditional investor-state arbitration with party-appointed arbitrators. First, the investment tribunal is comprised of 15 judges (selected jointly by the EU and Canada) and drawn from EU, US, and third country nationals. The state parties vet judges on the “roster” for this tribunal to ensure they have the appropriate qualifications for adjudicating international investment disputes. Importantly, in departure from the traditional approach, the disputing parties would not be able to choose the composition of their arbitral tribunals from the roster of arbitrators. Rather, the tribunal members would be randomly selected from that roster and include one member from the EU, US, and a third party for each dispute. […]

While it would be premature to draw general normative conclusions about how investor state arbitration may be improved, the paper also showed that there may be a trade-off between arbitrator incentives and policy preferences. A standing investment tribunal may address undesirable incentives that arbitrators on ad hoc arbitral tribunals are subject to (though as this paper has shown, these incentives are not, on the whole, an important driver of ICSID arbitral decisions). Conversely, a standing tribunal may give greater room for arbitrators to bring their policy preferences to bear on disputes before them. […] 

(All images courtesy of Wikimedia Commons)