Standard of Review: Investment Arbitration

by Dr. Joshua Paine

This paper was first published as ‘MPILux Working Paper 1 (2018)’. The full and final text is now available online as an entry of the Max Planck Encyclopedia of International Procedural Law, published by OUP at

Abstract: The ‘standard of review’ is commonly understood to refer to the intensity of the scrutiny applied by an international arbitral tribunal to prior determinations of fact and/or law made by another decision-maker, most commonly an organ of the host state. The key contribution of this paper is to provide an overview of the wide variety of contexts in which the issue of the standard of review has arisen in publicly available investment arbitration awards. The contexts reviewed include cases involving arbitral scrutiny of host state measures based on scientific or other forms of specialised knowledge; awards considering whether a ‘margin of appreciation’ doctrine or something similar applies in investor-state arbitration; awards concerning the potential deference due to domestic court decisions in relation to interpretations of domestic law; awards involving scrutiny of measures adopted during emergency situations; and the standard of review in annulment proceedings under the ICSID Convention. The entry also addresses the normative considerations which are relevant to determining the appropriate standard of review in investor-state arbitration, such as the potentially greater expertise, institutional capacity, legitimacy, and accountability of domestic-level decision-makers. The standard of review is likely to remain a crucial question in investor-state arbitration, including in the context of ongoing efforts to reform this area of international adjudication and the balance of interests it strikes. This paper provides a state of the art introduction to the substantial case law and literature on this topic.