Chapter 6: Academia's trojan horse: Is the arbitration industry undermining independent research?

Through academic teaching, conferences, research and publications, Lévy Kaufmann-Kohler's lawyers are constantly at the forefront of the developments in international arbitration law.

Website of law firm Lévy Kaufmann-Kohler1

Imagine that half of all scientific writing on public health was written by pharmaceutical companies. Or imagine that oil companies took over the editorial boards of environmental law journals, directing their tone and position.When it comes to academic research on international investment law, these scenarios are not so far-fetched. The arbitration industry appears to have a firm grip on what is written and taught about its own activities and decisions – with academics apparently for hire, and journals captured by industry.

Arbitration boom triggers a scholarly boom

The explosion in high-stake investment treaty disputes from the mid-1990s onwards paved a new career path for lawyers in private practice. It did not take long for this to trigger a derivative boom in academia. Today, international investment law is a distinct legal field, with dedicated courses and institutes and a growing body of publications and PhDs. There are newsletters, mailing lists, summer schools, conferences, and simulated legal proceedings (moot courts). In the words of investment law researcher Stephan Schill, “investment law is sexy”2.

Part of the attraction is that this field is constantly evolving through new awards and treaties. It is international law put into practice, touching on many of the key legal, political and economic questions of our time. It is practised by a globe-spanning and inter-mingled community. It is a field where boundaries between theory and practice are blurred. And it is very lucrative, delivering handsome fees for lawyers but also for the academics who serve as counsel, arbitrators or as experts-for-hire in the system (see box 3 on page 15)3.

Investment arbitration is an academic goldmine.

George Bermann, arbitrator and professor, Colombia Law School4

Penning the literature

This blending of the study and the business of investment law is obvious in the literature. Much of the writing is done by lawyers and arbitrators who make money when companies sue states under investment treaties. One canon of recent essential writings in the field comprises 51 books and articles5, more than half of which (30) were (co-)written or edited by investment lawyers and arbitrators. The three existing volumes of the Yearbook on International Investment Law and Policy contain 50 texts6, of which nearly half (23) were (co-) written by lawyers, arbitrators and assistants in arbitrations.

The editorial direction, as well as the content of important journals in the field is also dominated by the arbitration industry. In some cases all of the major journals’ editorial board members are people who have earned income as arbitrators, experts, counsel or from institutions that administer arbitrations. On average, 74% of the editorial board members of these journals have a background in the arbitration industry. Elite arbitrators (see chapter 4) appear to have a particularly strong influence over editorial policies at the leading journals (see table 4 on page 66).

The career background of these ‘academic’ writers on investment law is not always revealed to their readers. Only two of the six leading journals provide basic information on the professional affiliation of their editorial board members7. But as many also hold academic posts, they often appear only as academics, with no mention of their financial interests in arbitration. Texts written by arbitrators are sometimes also published without that crucial information. But shouldn’t students who read, for example, William W. Park’s defence of the integrity of the arbitration system learn that ‘Professor’ Park himself makes money as an arbitrator8?

In other academic fields, disclosing authors’ conflicts of interests appears to be more common. According to the conflicts of interest guidelines used by the International Committee of Medical Journal Editors, for example, authors have to disclose “all financial and personal relationships that might bias their work”. The guidelines also state that journal editors “must have no personal, professional, or financial involvement in any of the issues they might judge”9.

Table 4

Practitioners on the editorial boards of the key journals10

Information correct as of 23 September 2012.

The scientific field is strongly influenced by lawyers and arbitrators publishing in the relevant journals.

PhD student in international investment law11

Multiple hats compromise academic independence

According to Schill, the career and financial background of many of those who write on investment treaty law and arbitration “constitutes a potential obstacle for independent and clear positioning as conflicts between academic analysis, political appraisal, professional interests, and arbitral independence are undoubtedly numerous”12.

Imagine for example, a law professor who is also an arbitrator and occasionally sits as an expert witness as well. Individuals who wear different hats must balance their need to be impartial in their academic analysis with the need to continue their work as an arbitrator when they are not teaching. Arbitrating is very likely the more lucrative of the two roles, but working as a professor has its perks as well. “Well”, our professor might think, “Why can’t I have my cake and eat it too?”.

You may end up wearing a lot of different hats in this business: teacher, scholar, arbitrator, expert and assistant counsel.

George Bermann, arbitrator and professor, Colombia Law School13

So, the hypothetical professor decides to research and publish in a way that elevates his or her standing in the community. Lawyers and other insiders take notice, boosting the professor’s career in arbitration. The professor is more likely to get appointments, calls to be an expert, and other favours from the arbitration community, such as a coveted scholar-in-residence position at a leading law firm14. But the professor’s contribution to critical, open-minded and honest reflection about investment law and arbitration may be limited. The search for the truth gets lost in a hunt for contracts and appointments.

Legitimising the arbitration business

The plethora of practitioner publications helps to perpetuate a position that sustains and promotes investment treaties and arbitration. One researcher thinks that “strongly critical views of the system” might not be published “because people who peer review you are people who are within the system”15. A PhD student of investment law argues that the industry’s dominance in the literature is a key factor “manipulating scientific analyses into a certain direction”16. Thanks to these tacit censorship mechanisms, ‘academic’ writing becomes a tool for the arbitration industry to legitimise its business.

In their 1996 study of the international arbitration community (‘Dealing in virtue’), sociologist Yves Dezalay and lawyer Bryant Garth documented the legitimising function that academia plays for the business of international arbitration. They reported that the “academic pedigree” of some arbitrators helped “promote the acceptance and recognition of arbitration throughout much of the world.” As a result, “law firms and businesses invest increasingly in the production of rules, cultivating links to outside academics and moving into learned circles themselves”17.

If you have strongly critical views of the system, you might not get publicised in investment treaty journals because people who peer review you are people who are within the system.

International investment law researcher18

Infiltrating universities, shaping young minds

Investment lawyers are in high demand as guest lecturers at universities. Some even preside over academic institutes and design study programmes, helping to guide the mindsets of the next generation of investment lawyers. No doubt, students will benefit from these insights into the legal practice of international investment law. But given the arbitration industry’s vested interest in growing its own business, the industry’s capture of programmes and study centres raises serious questions about balance and independence.

Academic lawyers [...] create a jurisprudence of arbitration that legitimates it more generally.

Yves Dezalay & Bryant Garth, Dealing in Virtue19

Take the one-year MA programme in International Dispute Settlement at the University of Geneva. Its website promises a “broad range of perspectives” for students looking for a career in a top law firm, international organisations, governments or academia. But the programme’s director, elite arbitrator Gabrielle Kaufmann-Kohler (see her profile on page 40), seems to think that, for a broad perspective, the views of other arbitrators will suffice. She sits with two of them on the five-member programme committee. Twenty of the 24 members of the advisory board are active arbitrators. Their names are familiar: Jan Paulsson, Brigitte Stern, Albert Jan van den Berg, Emmanuel Gaillard, Doak Bishop, William W. Park, Christoph Schreuer – among others20. These arbitrators also teach courses on the MA, many of them related to investment arbitration. None of the teachers have a critical perspective on the system.

Most of the elite-15 arbitrators who reap the lion’s share of the business of investor-state disputes are or were at some point professors at universities that are considered intellectual hotspots in the field of investment law. These professorships helped build their stature as lawyers, shape young minds and promote the system.

The debate that is yet to happen

When Dezalay and Garth published their expose on the international arbitration circuit in 1996, they noted that, unlike the practitioners they had interviewed for their study, “legal academics, tend to resist thinking in terms of the internal politics of the field of law (or, similarly, seeing their role in that politics)”21.

This remark seems to hold true today. There does not appear to have been any debate as yet about the influence of the arbitration industry on what is taught and published about international investment law and arbitration22. But doesn’t a legal field with such far-reaching ramifications for governments and companies deserve this debate?

It should raise concerns if, at universities, lawyers teach investment protection law and their bias cannot be balanced by other viewpoints.

PhD student in international investment law23

References chapter 6

• 1. Lévy Kaufmann-Kohler (2012) Our publications, http://www.lk-k.com/uk/publications.html [10-09-2012].
• 2. Interview with Stephan Schill, Senior Research Fellow at the Max-Planck Institute for Comparative Public Law and International Law in Heidelberg, 2 May 2012.
• 3. Ibid. and interview with PhD scholar in international investment law who asked to remain anonymous, 23 May 2012.
• 4. Perry, Sebastian (2012) A man with many hats, Global Arbitration Review, 10 May, http://www.globalarbitrationreview.com/news/article/30531/a-man-hats [10-09-2012].
• 5. See the select bibliography in Schill, Stephan W. (2011) W(h)ither Fragmentation? On the Literature and Sociology of International Investment Law, European Journal of International Law 22:3, 875-908, pp. 905ff.
• 6. For the content tables of editions of the yearbook until 2010/2011, see: Vale Columbia Center on Sustainable International Investment: Yearbook, http://www.vcc.columbia.edu/yearbook [10-09-2012].
• 7. Journal of International Dispute Settlement and Transnational Dispute Management.
• 8. William W. Park’s article “Arbitrator Integrity: The Transient and the Permanent” published in the San Diego Law Review in 2009 is just one example of a practitioner not declaring his business interest as an arbitrator in academic circles. At the bottom of the article, readers learn that Park is Professor of Law at Boston University and the general editor of the journal Arbitration International.
• 9. ICMJE (2009) Uniform Requirements for Manuscripts Submitted to Biomedical Journals. Ethical Considerations in the Conduct and Reporting of Research. Conflicts of interest, http://www.icmje.org/ethical_4conflicts.html [15-10-2012].
• 10. Taken from Stephan Schill’s overview of the literature in the field (see Schill, Stephan W. (2011), endnote 5, p. 876). General information about the editorial boards and the names of the board members have been taken from the journals’ websites. Board members’ links to the arbitration industry were collected through internet research and can be provided. The information is correct as of 24 September 2012.
• 11. Interview with PhD scholar in international investment law, see endnote 3.
• 12. Schill, Stephan W. (2011), see endnote 5.
• 13. Perry, Sebastian (2012), see endnote 4.
• 14. The law firm Wilmer Hale runs such a scholar-in-residence programme. Positions are offered to “talented professors, lecturers and other academics” and come with “an office, use of library and other research facilities, and secretarial and other support services, as well as an honorarium in appropriate cases.” See, Alford, Roger (2011) WilmerHale Seeks Arbitration Scholar-in-Residence in London, Kluwer Arbitration Blog, 13 January, http://kluwerarbitrationblog.com/blog/2011/01/13/wilmer-hale-seeks-arbit... [10-09-2012].
• 15. Interview with investment law researcher who asked to remain anonymous, 1 June 2012.
• 16. Interview with PhD scholar in international investment law, see endnote 3.
• 17. Dezaly, Yves/ Garth, Bryant G. (1996) Dealing in Virtue. International Commercial Arbitration and the Construction of a Transnational Legal Order, pp. 42, 179.
• 18. Interview with investment law researcher, see endnote 15.
• 19. Dezalay, Yves/ Garth, Bryant G. (1996), see endnote 17, p. 195.
• 20. University of Geneva/ The Graduate Institute (2011) MIDS – Geneva LL.M. In International Dispute Settlement. 2012-2013 program, pp. 5, 6, 8-11. The links of the members of the programme committee and the advisory board to the arbitration industry were collected through internet research and can be provided. The information is correct as of 24 September 2012.
• 21. Dezaly, Yves/ Garth, Bryant G. (1996), see endnote 17, p. 4.
• 22. Interview with Stephan Schill, see endnote 2; interview with PhD scholar in international investment law, see endnote 3.
• 23. Interview with PhD scholar in international investment law, see endnote 3.