The West and the Rest: Geographic Diversity and the Role of Arbitrator Nationality in Investment Arbitration

The lack of geographic diversity among arbitrators is a common critique of investor–state dispute settlement. This has emerged as a major legitimacy problem as 80% of ISDS cases are against non-Western respondent states. In this chapter, the authors map the existing level of diversity with new methods (tracking both nationality and residence) and examine whether greater diversity would make a difference in outcomes. The descriptive statistics reveal that only a third of arbitral appointments have gone to non-Western individuals, and that this falls to 25% when residence is taken into account. However, the issue becomes more complicated when examining the effect on outcomes. The regression analysis indicates that the absence of geographic representativeness can favour Western home and host states, especially when the Chair is from the West. However, possibly due to a high degree of institutionalization and socialization of arbitrators in the system, it does not appear at present that arbitrator nationality has a significant effect on outcomes.