Between power and procedure: the changing balance of investment treaty protections

Abstract

In recent investment agreements, states have expanded their rights to protect essential interests, while also granting new procedural rights to investors. Why are states simultaneously expanding and limiting their power? After reviewing recent treaty practice, this article argues that these seemingly contradictory trends illustrate three main developments: first, investment treaties now operate as instruments of governance based on rule of law principles; second, treaty parties wish to limit the authority of tribunals and provide greater predictability to host states and investors; finally, widespread change in the investment law regime can occur rapidly and bilaterally. These three developments together provide optimism for the future of investor-state arbitration.