Key Takeaways
- • Akin's international arbitration team—Dr. Kabir Duggal, Felipe Nazar Pagani, and Matheus Bastos Oliveira—published a chapter in Global Arbitration Review's third edition of The Guide to Investment Treaty Protection and Enforcement examining ethical standards in investor-state dispute settlement (ISDS).
- • The chapter maps ethical obligations across all key ISDS participants: parties, counsel, arbitrators, experts, witnesses, and third-party funders, addressing a fragmented regulatory landscape spanning arbitral rules, institutional guidelines, domestic professional standards, and soft-law instruments.
- • The authors argue that ethical regulation should prioritize clarity, credibility, and enforceability to sustain systemic confidence in ISDS fairness and legitimacy, rather than pursuing uniformity for its own sake.
- • The analysis includes emerging governance questions around artificial intelligence deployment in ISDS proceedings, signaling growing concern over technology-driven risks in international arbitration.
Summary
Global Arbitration Review has published a comprehensive chapter examining the ethical framework governing investor-state dispute settlement, a critical area for institutional investors and alternative investment professionals navigating cross-border investment disputes and treaty protections. The chapter, titled "Mapping the Ethical Fault Lines in Investor-State Disputes," was authored by Akin's international arbitration practice—partners Dr. Kabir Duggal and Felipe Nazar Pagani alongside counsel Matheus Bastos Oliveira—and appears in the third edition of The Guide to Investment Treaty Protection and Enforcement.
The work systematically reviews the obligations and conduct standards applicable to all stakeholders in ISDS proceedings. Rather than proposing a unified global code, the authors acknowledge that ethical requirements emerge from a complex network of overlapping sources: bilateral and multilateral arbitral rules, institutional procedural guidelines, counsel's domestic professional responsibilities, and non-binding soft-law frameworks. This decentralized approach creates both flexibility and potential inconsistency—a central concern for parties managing reputational and legal risk in high-stakes disputes.
A core argument advanced by the authors addresses the purpose of ethical regulation itself. They contend that the objective is not "uniformity for its own sake," but rather ensuring that ethical standards remain "sufficiently clear, credible and enforceable to sustain confidence in the fairness and legitimacy of ISDS as a system of adjudication." This framing is particularly relevant for institutional investors and capital allocators who rely on ISDS as a dispute resolution mechanism; weakened confidence in procedural integrity directly impacts investment decision-making and treaty-based risk assessment.
The chapter also flags emerging governance challenges, specifically the application of artificial intelligence in ISDS proceedings. As AI increasingly automates document review, legal research, and witness preparation in international arbitration, the ethical implications—including disclosure obligations, bias mitigation, and confidentiality protection—remain underdeveloped. This forward-looking analysis signals that the arbitration community recognizes technology-driven governance gaps require immediate attention.
The work systematically reviews the obligations and conduct standards applicable to all stakeholders in ISDS proceedings. Rather than proposing a unified global code, the authors acknowledge that ethical requirements emerge from a complex network of overlapping sources: bilateral and multilateral arbitral rules, institutional procedural guidelines, counsel's domestic professional responsibilities, and non-binding soft-law frameworks. This decentralized approach creates both flexibility and potential inconsistency—a central concern for parties managing reputational and legal risk in high-stakes disputes.
A core argument advanced by the authors addresses the purpose of ethical regulation itself. They contend that the objective is not "uniformity for its own sake," but rather ensuring that ethical standards remain "sufficiently clear, credible and enforceable to sustain confidence in the fairness and legitimacy of ISDS as a system of adjudication." This framing is particularly relevant for institutional investors and capital allocators who rely on ISDS as a dispute resolution mechanism; weakened confidence in procedural integrity directly impacts investment decision-making and treaty-based risk assessment.
The chapter also flags emerging governance challenges, specifically the application of artificial intelligence in ISDS proceedings. As AI increasingly automates document review, legal research, and witness preparation in international arbitration, the ethical implications—including disclosure obligations, bias mitigation, and confidentiality protection—remain underdeveloped. This forward-looking analysis signals that the arbitration community recognizes technology-driven governance gaps require immediate attention.
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