David Wilkins, faculty director of the HLS Center on the Legal Profession, sat down with Philippe Sands, an arbitrator and renowned scholar of international law, to talk about his career and challenges to the field.
David Wilkins: Thank you for joining us, Philippe. One of the things that’s so amazing about you is that you’ve done so many different things: human rights advocate, authority on genocide and ecocide, and of course international arbitrator. By way of background, is there a thread that holds these areas together? How have you moved from one to another, and how do they relate?
Philippe Sands: I do think there is a thread throughout the range of my activities as a teacher, researcher, practitioner, arbitrator, and now a writer. And that starts with the role of the international legal order as it was conceived at that remarkable moment in 1945, when a group of countries attempted to reconceive the world with a rules-based system as its beating heart.
Out of that system emerged many things—rules on the law of the sea, on international arbitration, on the rights of individuals and of groups. Everything that I do is connected to that moment and the ideas flowing out of it. I start with the idea of the international legal order as the organizing structure, and with it, a commitment to the notion that in a complex world in which we have to share a small and difficult space, international law may be the only language we have in common. That is the beating heart of what I do.
Wilkins: That leads me to my second question on how international arbitration occupies a unique space. Unlike the state-based or international institutions, at least at their heart, it is often about private ordering, around contracts, around privacy, and around disputes. The parties set, in many ways, their own rules for the disputes. I wonder what drew you to that part of this complex field.
Sands: While I was a visitor here at Harvard Law School in 1980, I received a letter from my former teacher at Cambridge University, Eli Lauterpacht. He was creating a Center for International Law, and he thought I’d done well in my exams and asked if I would like to apply for the position as a research fellow. When I started working as a very junior academic, the first thing he got me working on was arbitration—specifically, international disputes in which states had allegedly interfered with an investment by a foreigner in that country’s jurisdiction, otherwise known as investor-state arbitration.
I start with the idea of the international legal order as the organizing structure, and with it, a commitment to the notion that in a complex world in which we have to share a small and difficult space, international law may be the only language we have in common.
Philippe Sands KC, Professor of the Public Understanding of Law, University College London
Eli then had me qualify as a barrister, and the very first brief that I was assigned in 1987, a bit part in Southern Pacific Properties v. Egypt, was one of the first cases before the International Centre for Settlement of Investment Disputes (ICSID). In a very curious way, it is my connection with Eli, who had been involved in some famous arbitrations—for instance, the Anglo-Iranian Oil Company case—that got me into the field. Eli was at the beating heart of the world of arbitration, mostly investor-state, some interstate, and occasional commercial. And he opened my life to it.
In 1993 I got my first brief on an investor-state case. It was a case brought by a Greek company, Tradex Hellas, against Albania. I was in my office at the University of London. The phone rings. It’s a former student of mine, Steven Hodgson, who is in Tirana, Albania, working as a consultant with the Ministry of Agriculture. He’s finally got into a locked cupboard in the ministry, in the legal adviser’s office. And in the cupboard are 20 FedEx packages, only one opened, from the World Bank in Washington informing them that Albania had been sued by this private company under the ICSID rules. There was a directions hearing in two weeks in Frankfurt, and he asked if I would turn up and attend pro bono. They couldn’t even pay for my flight to Frankfurt. And being of the character that I am, I thought, “Well, this sounds quite interesting.”
I brought a colleague, an international lawyer who’d never done an international investment case before, James Crawford, into the case. We worked on it together with a third colleague, Ruth McKenzie. The entire case—jurisdiction objections, two rounds of written pleadings, two days of oral arguments, and then merits, two rounds of written pleadings, five days of oral arguments—between the three of us cost £75,000.
I’m very proud of that case because the award that came down three or four years later was the first time that a respondent’s state in ICSID proceedings won 3-0 unanimously. That was my real start in the world of arbitration—from academic researcher to lawyer.
Wilkins: You then segue eventually into being an arbitrator—one of the most famous and well-respected in the world. And yet you have been quite articulate and vocal about this idea of double-hatting, which is another of those things that’s quite unique to arbitration. You’ve been quite critical of this, even though the way to become an arbitrator oftentimes is to do as you did and become a very successful arbitration lawyer.
Sands: To be clear, some of my best friends have been double-hatters! I was first approached to be an arbitrator in 2007. By then I had already formed the view as counsel facing some arbitrators who were double-hatting that there was self-evidently a problem. I should also say that double-hatting in pure, commercial arbitration is something totally different. If two private companies or entities want to get involved in an arbitral process in which double-hatting is permitted, that’s fine. I’ve got no view on that.
Wilkins: To jump in, why is that?
Sands: First, in commercial arbitration, every case is completely different. The cause of action, the facts are invariably very different. In investor-state arbitration the claimant is a private entity and the respondent is a state; therefore, the public sector is involved; the taxpayer is involved. It’s not a pure case of two entities that exist in order to make a profit that have fallen into a dispute. There is a different sort of social function in relation to one of the parties, and I think that’s different.
What would a reasonable objective observer feel knowing that the arbitrator is also engaged in private activity as counsel dealing with the same issues?
Philippe Sands
Secondly, causes of action in investor-state arbitration are essentially always the same. Is it an expropriation? Is it an unfair and equitable treatment? Has there been failure to provide full protection and security? Has there been discrimination? Is it arbitrary? And in each of those cases, the role of the arbitrators is to interpret the applicable law, usually a treaty, and then apply that applicable law to the facts. This is where double-hatting comes into play.
When I was counsel, I always had difficulty with the idea that someone I’m appearing before is interpreting “fair and equitable treatment” in one way in the tribunal I’m sitting in front of, but that morning may have been making a different argument of what is fair and equitable treatment for one of their clients before a different tribunal. That struck me as a problem. Can one human really disentangle their thinking about what they’re doing in the morning as counsel wanting a particular interpretation of fair and equitable treatment, and then in the afternoon sitting on another case as arbitrator, interpreting essentially the same context? What would a reasonable objective observer feel knowing that the arbitrator is also engaged in private activity as counsel dealing with the same issues?
For that reason, when I was appointed in 2007, I put on the website of my then-barristers’ chambers that I would no longer act as counsel or as an expert in investor-state arbitrations. I had two or three cases outstanding, and I decided to sit them out. And from then on, I’ve only been arbitrating. For me it works.
I should say, I wear another hat as arbitrator as a member of the Court of Arbitration for Sport based in Lausanne. I joined in 2012 and acted as an arbitrator at the Olympics in Paris in 2024, including sitting on the panel that decided that Jordan Chiles’s appeal had been filed four seconds too late.
I’m very open to the idea of transitional rules in which there may be a period in which younger people who want to transition into becoming an arbitrator from counsel are able to do both in order to segue into a reasonable practice.
Philippe Sands
I mention this because shortly after I joined the Court of Arbitration for Sport, a rule was adopted to prevent double-hatting. Things had previously gotten tricky around a series of cycling cases in which the CAS and other arbitration bodies were involved and then went into the United States courts. Issues were raised about an arbitral award handed down by a panel that included individuals who were also acting as counsel in relation to disputes of the same sport. As a precautionary matter, CAS adopted a blanket rule that in the field of sports, you are counsel or arbitrator. I have seen that work very well.
There’s one other issue I definitely do want to note, because you’ve alluded to it and it undermines my own position and argument, and I’m very conscious of it: How do people move from being counsel to arbitrator?
I completely accept and recognize there is an issue, particularly where in my field very few women have been involved as arbitrators in international or sports cases. Imagine you’re a female counsel in your thirties or forties and you want to become an arbitrator. There’s a lot to be said for the possibility that such a person, who may not be an academic like me and have other income that they can live off, needs to transition into becoming an arbitrator. So I’m very open to the idea of transitional rules in which there may be a period in which younger people who want to transition into becoming an arbitrator from counsel are able to do both in order to segue into a reasonable practice. That I accept—that is important.
But for people like me, who have other lives and incomes and where I’m not dependent on that kind of work, I don’t think it is good to double-hat. That is the position that I’ve taken, but I fully respect that there are people who do. James Crawford, sadly no longer with us, always double-hatted. And I suppose I never had a problem with that because I knew his integrity was impeccable.
Wilkins: That leads me to something that my guess is you have views on, too. Many arbitrators are also either academics or people who write extensively or express their opinions publicly. I wonder how you think that fits into the field.
Sands: I think it’s difficult and it’s delicate. I’ve not written any academic works on the field of investor-state arbitration. I’ve given lectures, most recently the LALIVE Lecture, in which I went pretty far in addressing some of the concerns that I have with the world of investor-state arbitration right now. I knew this would be publicly available, and I was conscious about what the consequences might be in terms of having expressed views on certain issues that could imply I did not have an open mind or that I lacked independence.
What I have more difficulty with is the kind of practice in which an entity “invests” in a whole raft of cases on the basis they only need to hit the jackpot in one case to make the whole thing lucrative and profitable.
Philippe Sands
One of the issues that’s been very contentious is third-party funding. And third-party funding was an issue that I felt I could not ignore in giving the LALIVE Lecture. So what I did was to reference the opinions I had given, sometimes dissenting, sometimes just a separate opinion on a particular issue raising concerns about the ways in which third-party funding were skewing the practice of investor-state arbitration. Now, again, I made it clear that I was not opposed to third-party funding as such. There are cases I’ve sat on as an investor-state arbitration that were supported by third-party funding, which were entirely meritorious. I completely accept that that is possible and that there is a very legitimate role there.
What I have more difficulty with is the kind of practice in which an entity “invests” in a whole raft of cases on the basis they only need to hit the jackpot in one case to make the whole thing lucrative and profitable. That I have more of a problem with because I think it tends to skew the practice of law before these processes. And the sums of money, frankly, can be eye-watering. I come back to my original experience of having done the Tradex Hellas case, split three ways, for £75,000. And I now find myself confronted in some instances with expenditures running into the tens of millions on cases and asking myself the question: How is it possible to spend so much money on some of these cases?
It may be that there is simply a cultural difference. I am a solo practitioner. I’m a barrister. I believe that what I do is imbued in part by elements of public service. I don’t consider myself to be involved in for-profit activity. I think we are very handsomely paid as investor-state arbitrators, and I am concerned about the influx of vast amounts of money for the direction that the field will take. This really goes to the question of the legitimacy of the whole process. I mean, I think there’s a place for investor-state arbitration or for the resolution of disputes involving investors and states. I worry that if it is infused with too much money and becomes effectively a business, the pressures to shut it down will become overwhelming. And so I urge care and caution in such matters.
Wilkins: That leads perfectly to my next question. How should we think about legitimacy in arbitration—all the more so as more public issues are being resolved through it as opposed to the courts. How do you think about that?
Sands: It comes back to what we were talking about earlier regarding the distinction between pure commercial arbitration and investor-state arbitration.
In pure commercial arbitration, if two companies want to litigate the hell out of each other and pay each other vast sums of money, it’s effectively going to be reflected in the price people have to pay to use their services as a company. That’s for them to decide.
With investor-state arbitration, the heart of each issue is a determination by a three-member arbitral tribunal on whether the actions of a state have crossed the line into illegality by reference to a bilateral or other treaty obligation. The actions can be ones that are taken for the public interest. They could relate to the rights of Indigenous peoples or the setting of a reasonable tariff for electricity produced by renewables or limitations placed on certain activities to protect the environment. In many cases, the investors worry that where the regulations have changed, they are going to be made less profitable or not profitable at all.
One option increasingly utilized is for those companies to bring cases to investor-state dispute settlement and arbitration. The panel is then effectively determining whether country A, B, or C has acted in accordance with its legal obligations under the applicable law or bilateral investment treaty in setting a particular tariff, or in limiting certain mining activities, or effects on biodiversity or climate change, or Indigenous people’s rights, or labor standards, or who knows what. That relates to the public good.
Of course, there are cases where a state may have behaved outrageously. I’ve had some of those cases, where it’s not about the exercise of police powers or the exercise of regulatory functions for the greater good, but where a state simply comes in and says, “Oh, I see that company’s doing really well—I want it,” and just takes it over. That’s a different kind of issue.
There is also a sense that big money has got its hands on this area [investor-state arbitration], and that is changing the character and the nature of it.
Philippe Sands
Where the issue is the determination by a panel about the legality under international law of measures exercised by a regulatory authority that are purported to be for the public good, then I think you’re in a situation in which arbitrators, like judges, are making determinations that have potentially significant consequences beyond the pure commercial sphere. That’s what makes investor-state arbitration so interesting—but also what makes it so complex in terms of legitimacy. You get rulings, in which a state is determined to have been in violation and it can’t do X, it can’t do Y. These are then addressed in the public domain, and people then start bellyaching.
The best example of that is in relation to the Energy Charter Treaty, a whole series of arbitral awards that are related to Spain, the renewable sector, the 2008 financial crisis, and a change in tariffs and other regulatory provisions. Many of the claimants succeeded in the early cases, and many people from outside of investor-state arbitration—members of the public and others—said this was limiting Spain’s ability to deal with its public-sector finances during a time of crisis, and more to the point, that the Energy Charter Treaty used in this way was undermining the ability of states to address climate change. The upshot is a whole raft of countries left the Energy Charter Treaty. It effectively ended investor-state arbitration in relation to those kinds of situations under that treaty. Arbitrators who will have been considered by the public or by states to have gone too far find that they’ve effectively killed the goose that laid the golden egg, and that is shut down.
Wilkins: One group of our readers that are quite keen to learn about this world, particularly in a place like Harvard Law School, are aspiring lawyers. It seems glamorous in some ways. It’s done in all these wonderful places like Geneva, Paris, and Singapore. And the disputes themselves are often of critical importance. For them, how do they enter this field? What is your advice for them?
Sands: It’s incredibly important to be supportive of the next generation because they are the ones to whom we have entrusted the responsibility of maintaining the rule of law in international matters. It’s a wonderful community. But I also have mixed feelings, as you’ve probably picked up. There are many people out there in the world of investor-state arbitration who are marvelous individuals—marvelous arbitrators and marvelous counsel. But there is also a sense that big money has got its hands on this area, and that is changing the character and the nature of it.
When students come to me, I go through all the various options that they can get involved in. They can go and spend some time working for one of the arbitral institutions: ICSID or the Permanent Court of Arbitration or the Stockholm Chamber of Commerce—rather remarkable organizations. That’s one career option.
Another career option is to work as a lawyer in arbitration. Here there are many different paths to take. It could be as a private lawyer, perhaps with one of the big firms, where you will end up most likely for the first few years as a tiny cog in a very big wheel. You will be superbly trained and paid—[but] query as to the nature of the experience you’ll learn. Or you can go to a boutique and really get your hands mucky.
I have to say (this is my experience sitting as an arbitrator), we have all sorts appear before us, but it’s very difficult when you’re looking across the room and you see on one side of the table some sort of vast delegation of 20-plus people working on a case that may not be particularly complex. And you ask yourself what’s going on and what are all these lovely folks up to? Then you look to the other side, and it’s a team of just three or four who know the case inside out and backward. That has really, in a sense, pushed me with my own students to encourage them to think about taking what might be the less easy option, which is to go for the smaller, less glamorous firm, probably earn less, but find yourself in a position five to 10 years down the line where your level of human happiness is likely to be enhanced.
I would add also there is the possibility of working on the public side. And increasingly there are options now in countries around the world—wonderful young lawyers working in governmental departments doing this kind of investor-state arbitration.
David Wilkins is the Lester Kissel Professor of Law at Harvard Law School and the faculty director of the Harvard Law School Center on the Legal Profession.
Philippe Sands KC is Professor of the Public Understanding of Law at University College London and Samuel LLM ’55, SJD ’59 and Judith Pisar Visiting Professor of Law at Harvard Law School. He is a practicing barrister at 11 Kings Bench Walk and frequently appears as counsel before the International Court of Justice and other international courts and tribunals. He sits as an arbitrator in international investment disputes and on the Court of Arbitration for Sport, and served as a CAS arbitrator at the Paris 2024 Olympic Games.
