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Noemi Gal-Or

Private vs. Public International Justice 
The Role of ADR in Global and Regional Economic Treaties

Summary of paper presented at the conference "Old Environments - New Environments"
Nordic Association for Canadian Studies VII triennial conference
8-11 August, 2002, Stockholm, Sweden
Available at <http://www.hum.au.dk.nacs/2002Stockholm/Stockholm2002_Trade%20Panel/Trad...>

Theoretical framework: Access to justice and international market practice and theory

This transdisciplinary paper revolves around two theoretical issues. First - procedural and substantive - the right of access to justice as comprising of both admittance to participate in the drafting of the law and standing, i.e. protection by the law. Presumably, any law, including international trade law, must be custodian of such access. Second, the (in)compatibility of market practice and theory and its misnomer of free trade, on the one hand, with fair trade, on the other hand. I explore these issues by addressing the relationship between free trade, justice, and fairness; inquiring whether international treaty-based ADR does constitute an international private justice system; studying the nature of the relationship between the private and public international justice systems (competitive, supplementary or simply parallel?); and concluding with three suggestions for future research.

The focus: Commercial alternative dispute resolution (ADR) in regional and global market integration

The main arguments in favour of international commercial ADR are based on the numerous disadvantages associated with litigation at both the international national levels. These entail various inconveniences in time, cost, limitations regarding personal and other jurisdiction, and subjection to the judicial process in foreign courts with differing legal systems. Another concern relates to the enforceability of foreign judgements. The resultant unpredictability, uncertainty, and risk in international commercial transactions have been soothed by promoting ADR as the panacea for many shortcomings of the international justice system. Most recently, the dynamics of a globalising economic and political (trans)international system and overburdened national judicial systems have increased the attractiveness of ADR in international trade and investment. 

Furthermore, within the framework of public international law, enabled by treaty law, the NAFTA and the GATT/WTO have created a special space for a select group of stakeholders, exempting it from recourse to the national courts and providing it with a preferential private dispute resolution treatment. This begs the question whether two paralleling kinds of international justice systems - a public and a private - based on a world economic "class" distinction, have been institutionalised. The ensuing reduced state capacity in securing the same menu of justice options for all appears to be undermining the holistic structure of the justice system traditionally governed by the state.

The argument: The justice deficit in international market integration and Trade Barriers to Justice (TBJs)

In this paper I make three arguments, which flow from the above observations: 
Free trade, justice, and fairness. Free trade is not synonymous with fair trade. In contrast to the tireless insistence monopolising the market oriented economic discourse, where the discussion of liberalisation in international economic relations has been confined to questions of efficiency and productivity, growth and income, I argue that the core of market liberalisation touches on rights and that this raises issues of fairness and its implementation through systems of justice. Therefore, the systems of international relations and law must be harmonised to accord by the least common denominator of fairness.
International treaty-based ADR is "private". As long as treaty-based but state-independent lex mercatoria, which is not subject to any ratification procedure (an oxymoron), remains the exclusive domain of a small and privileged category of stakeholders, the paradox of a 'private enclave' within the public justice system will continue to unsettle the law's universal ideology. Practically, the opportunities for smaller economic actors and other stakeholders to partake as equals in the denationalising market place are being curbed, their chances of benefiting from freer trade reduced. 

The relationship between the private and public international justice systems. The delineation of the "public" from the "private" has become increasingly blurred in international law notably in relation to, and as a result of, the proliferation of free trade arrangements. Regional (and bilateral) integration agreements represent a place where international economic law and international business law, public and private international law, intersect and intertwine. As the sources of both laws are different, and the interests propelling the development (private vs. public) are often (not always) hard to reconcile, the "legal product" and its effects are still unclear. This will most likely have profound implications for the nature of justice - and notions of fairness - in the new century. 

The standard of measurement: The foundations of fairness and a fairness test

Fairness (Franck, T.M. Fairness in International Law and Institutions. Oxford: Clarendon Press, 1995), which has multiple interpretations and appearances, rests on two foundations: Legitimacy and distributive justice. I interpret Franck as suggesting a two-legged test of fairness addressing both these procedural and substantive foundations of fairness. I am applying elements of Franck's fairness test to ascertain the extent of the justice deficit in regional and international market integration, namely, whether the contours of the "benefit" of regional and global market integration do indeed encompass questions of justice, and whether lack of universal access to justice does indeed constitute a non-tariff barrier (NTB) to trade or, on the flip side, a trade barrier to justice.

Testing and measuring the arguments

In the process of testing and measuring my arguments, I explore the role of the GATT/WTO and NAFTA examples, and the EU's external trade relations in enabling international treaty-based dispute resolutions comprising of a "private enclave" for a select economic "class"; the nature of public vs. private international law as manifested in regional integration agreements, and the intersection of international economic & business law; the difference between justice and law as reflected in international law; and the economic vs. legal definitions of the subject of international law.

I examine the relationship between public and private international law by reviewing the historical evolution of ADR, the social origins of ADR in international economic law, the transnational capitalist class (TCC), the role and performance of TCC actors and agents, and those excluded. I examine the normative quest for legitimacy in the processes of institutionalism and constitutionalism aided by the legal profession and crystallising in lex mercatoria & lex arbitri. I use the GATT/WTO and the NAFTA experience in institutionalisation, regime building, organisation building, and spillover, and their mutual influence as well as the EU's related external economic relations to test the theory. Finally, I explore the new debate on international constitutionalisation in the context of regional and international market liberalisation. 

Conclusion: The fairness test in theory and practise

I conclude the paper by raising three issues for future research. First, whether fairness must be done and seen to be done rather than perceived. Second, can fairness be satisfied by an expansion of the scope of the private international (commercial) justice system to incorporate all directly related and indirectly affected actors and stakeholders? Does the theory of justice tolerate the co-existence of two systems of international justice - one public the other private - if they guarantee the inclusion of all? If rejected, would de-privatisation of the private international justice system remain the only option? And finally, what are some normative and practical policy related approaches that arise out of juxtaposing concrete questions with either answer (monism or dualism) to the above question? Which institutionalisation process should be applied? Can democracy and representation be assured? Should and can state sovereignty be re-defined? Where should the reform be first tested and to what extent? In the future FTAA? With regard to foreign investment provisions? In local transborder regions?