The Future of International Investment Law and Arbitration

Abstract

Abstract International agreements and their dispute-resolution mechanisms have assumed a role in establishing the minimum standards for the governance of foreign investment by host states and supervising and implementing them. There are now some 2,800 bilateral investment treaties, most of which allow the qualifying investor itself, acting without the intervention or permission of its state of nationality, to invoke an international tribunal to review host state action, in terms of, inter alia, whether it has constituted ‘fair and equitable’ treatment. This is a procedural change with far-reaching substantive implications which make international investment law unique in international law. To respond to current stresses within the legal arrangements now collectively referred to as international investment law, five alternative futures are delineated: global integration (more and more direct foreign investment would be made worldwide, on the basis of economic rather than political considerations; in addition, there would be more decisions by international investment tribunals with respect to the quality of governance within states which hosted foreign investment); regional and sub-regional integration; recrudescence of protectionism and mercantilism; revival of the New International Economic Order system; and continuation of the present heterogeneous system. It is argued that in the future the first option is the most desirable, for its promise of enhanced production and the efficient use of the resources of our planet and the resulting interdependence which, one hopes, will act as a restraint on the use of violence.