Precedent in the Settlement of International Economic Disputes: the WTO and the Investment Arbitration Models

The issue of precedential value of previous judicial and arbitral decisions in international adjudication and arbitration is contentious. The paper undertakes a critical comparison with a focus international economic disputes. While not binding, precedents carry great authority when they proceed from the same court or body. The increased number of international courts make reference to precedents also from other courts relevant in order to avoid fragmentation of international law. While in international commercial arbitration there is no precedential value of previous awards, consideration of precedent is important at ICSID, especially within Annulment Committees where consistency is crucial for the operation and legitimacy of the mechanism. At WTO the "vertical " authority of Appellate Body decisions for Panels has been firmly stated by the Appellate Body as a key features of the WTO adjudicatory system and stands as an example.