Global Perspectives on Teaching International Investment Arbitration: Teaching International Investment Arbitration Law in a Digital Environment

When I first began teaching international economic law subjects to law students, the use of the Internet was just beginning to gain global traction. Today, some decades later, both the legal and technology landscapes have evolved vastly.

International investment treaty provisions and investment arbitration have grown tremendously. Arbitration centres (and international commercial courts) which may hear investment arbitration claims have proliferated across regions. In the field of technology, commercial ventures relating to digital assets and services, and to data centre infrastructure, are still growing. Artificial intelligence (“AI”) – with its increasing demands for data and data flows across borders – and distributed ledger technology tools are in ascendancy.

What do these have to do with the teaching of international investment arbitration? The following are some observations which I hope will promote conversations and thoughtful sharing among those engaged in academic and professional training in international investment arbitration.

Investment Arbitration and Digital Issues: Curriculum, Teaching, and Research Considerations

Against the backdrop of technological change, a course on international investment law and arbitration should be designed for legal training in an increasingly digitalized environment. Its objectives should not only be in the imparting of international investment law concepts and principles but also include thoughts on their application in the context of an increasingly digitalized world.

I imagine that most courses would include relevant concepts which frequently arise in investment arbitrations, such as ratione personae, ratione materiae, Most-Favoured Nation Treatment, National Treatment, Fair and Equitable Treatment and Expropriation clauses. A course would also likely contain discussions on the investment arbitration process itself and noteworthy procedural issues. Conscious building of a ‘technology layer’ of issues into such a course for students to consider would help to increase its relevance in the evolving arbitration environment. Technology is becoming increasingly ubiquitous, and the field of investment law is and will continue to be impacted by it.

Technology can also play a significant role in teaching investment arbitration, ranging from a basic display of relevant materials on classroom screens to the use of AI to produce interesting illustrations and discussion questions for students to consider.

Research on investment law and arbitration is also greatly enhanced by the existence of a number of important databases on claims and their associated documentation. Teaching students investment law also requires ensuring that they are able to make the most effective use of such digital resources for coursework and for investment mooting activities.

Investment Law in an Increasingly Digitalized Commercial Environment

With the rapid growth of digitalization in assets and services and of AI tools, investment activities in these and associated infrastructure facilities can be expected to increase. Take, for example, investments made in digital service providers and data centres around the world (see here and here). The latter are in strong demand as they are required to store and process massive amounts of data required for AI activities and research. While one may be tempted to think that disputes relating to such investments (and any arbitrations which may arise) will be no different from those in brick-and-mortar investments, some questions are worth exploring when teaching students about the new landscape in which they will be operating.

For example, many investment treaty provisions – whether they are found in bilateral investment agreements or free trade agreements – were drafted in a time predating the rapid digitalization of the global economy. This can lead to threshold questions regarding the scope of such provisions and whether, for example, terms such as “investment” in a given treaty would encompass newer types of activities in relation to intangible items (such as tokenized assets) and decentralized finance through Decentralized Autonomous Organizations (“DAOs”). Such issues are important, and they can impact the jurisdiction of a tribunal.

As another example, investment activities involving data transfers, processing and storage may potentially raise issues in the context of treaty provisions relating to ‘regulatory space’ and to whether any treaty exceptions might apply to particular State measures. The hints that such matters may arise can already be seen in E-commerce treaty provisions relating to measures on data storage requirements and their associated exceptions.

AI, Blockchain Technology, and Investment Arbitration

A question which practitioners will encounter is the use of AI in investment disputes. This has at least three dimensions: the use of AI by a tribunal, by counsel, and in the administration of a case. While a number of Bar associations, courts and arbitration centres have published guidelines on the use of AI in disputes and address, for example, the need for disclosure of the use of such tools, other issues are not yet necessarily addressed (see, e.g., the guidelines developed by the Chartered Institute of Arbitrators and the International Bar Association (here and here)). Law students will need to be prepared for the environment into which they will graduate, in which such tools will be increasingly pervasive (and tempting to use even when it might not be appropriate to do so). Apart from the need to be aware of existing guidelines, students need to be prepared for practice by being cognizant of the relevance (and permissibility) of the use of AI tools in submissions, award preparation and writing, and of what other boundaries may need to be considered. Indeed, given the frequently cited complaint regarding the costs of arbitration, it is not unimaginable for some to advocate the use of more, rather than less, AI in the arbitration process. While the risk of human arbitrators being replaced by AI tools designed to resolve investment and commercial arbitrations is not yet a professional existential matter given that AI tools can still be prone to inaccuracies, hallucinations and bias, there may come a time when parties are prepared to test such tools for, say, smaller claims, with agreed bespoke safeguards between them in order to save time and costs.

Concomitant with the development of expertise in investment arbitration law, students need to be exposed to a range of digital economy commercial activities, business models and investments. As these could form the subject matter of future investment disputes, familiarity with these will help prepare the next generation of arbitration counsel and arbitrators. Already, many commentaries are emphasizing that more digital asset-related investment disputes may be on the horizon.

Another aspect worth exploring in the teaching of investment arbitration in a highly digitalized environment is the potential use of decentralized ledger technology tools (such as blockchain tools). Already, on-chain arbitrations (such as in the context of DAOs) are a subject of discussion, to leverage on the immutability of records on a blockchain and the availability of ‘smart contract’ processes. Such tools can also provide advantages in evidence preservation and authentication.

Conclusion

As technology and investment activities continue to evolve, so must the teaching of investment law and investment arbitration. While the application of investment treaty concepts and principles will remain largely in familiar territory, emerging areas of potential investment issues should not be omitted from the classroom if we are to equip students (and the profession) well for the changing business and technology landscape.