The Reform of Investor-State Dispute Settlement: Bringing the Findings of Social Psychology into the Debate

Abstract

Abstract This article introduces the findings of social psychology, especially group psychology, into the study of investment arbitration. It argues that arbitrators as members of small groups (i.e. tribunals or divisions in an Investment Court) might be subjected to a number of influences inherent to such collective settings—factors already proven to be at play in domestic courts. In turn, identifying those factors provides an opportunity to reduce their impact on the decision-making of legal adjudicators through the implementation of adequate remedies. Adopting one of the most popular models of group decision-making—groupthink— this article discusses the manifestations and implications of this theory for Investor-State Dispute Settlement both in its ad hoc and institutionalized forms. Specifically, it claims that the Investment Court defended by the EU and generally posited in some agreements might not be that different from the current system from a socio-psychological perspective, and hence could be further improved.