International Investment Law: An Appraisal from the Perspective of the New Haven School of International Law

Abstract

Contemporary international investment law is directly related to the deepening and intensification of globalisation. In this era of enhanced economic globalisation, with rapidly increasing transnational investment activities, individual countries are becoming more and more dependent on foreign investments. Taking foreign investment as a short cut for domestic economic development, nearly all nations have tried to create a favourable environment to compete with each other in attracting it.1 The frequent incorporation of investor–State arbitration clauses into bilateral investment treaties (‘BIT’s) is one result of such competition. In these circumstances, refusing to enforce arbitral awards made under BITs would be regarded as providing a less favourable domestic investment environment. In order to retain a competitive status, countries seldom fail to enforce such awards. This has actually not only encouraged foreign investors to submit disputes to international arbitrations but also encouraged tribunals to publicise the arbitral awards, as the publication itself will impose pressure on the host countries to implement the awards. Therefore, beyond all doubt, contemporary international investment law must be examined by analysing the operation of the dispute settlement mechanisms relating to international investment, especially the awards made by the International Centre for Settlement of Investment Disputes (‘ICSID’).Established under the Washington Convention of 1965,2 ICSID has played an irreplaceable role in investor-State dispute settlement and become the most important institution for settling investment disputes. In addition to BITs, the Energy Charter Treaty and the North American Free Trade Agreement (‘NAFTA’), many free trade agreements (‘FTA’s) include provisions enabling investors to submit their disputes with host countries to ICSID. This may even be the case for those countries which are not parties to the ICSID Convention; in such cases, the disputing parties need to apply the Additional Facilities of ICSID.3This paper examines some of the fratures of international investment law from the perspective of the New Haven School of International Law, including interpenetration o f internationala nd nationaln orms, participation by arbitral tribunals in interpreting treaties and ascertaining values that parties are supposed to attach to such treaties, and the formation of case law in international investment.