International Investment Treaties Research Articles

Do bilateral investment treaties help post-coup countries attract foreign investment?

Studies of international investment treaties have debated whether these agreements independently increase foreign investment flows. This article contributes to the debate by contextualizing the impact of bilateral investment treaties on post-coup domestic political environments. We argue that these treaties enable capital-receiving countries to live up to their commitments of investment protection and promote foreign investment when signatories’ capacity for investor protection has been compromised by the political turmoil of coup events. Using a sample that covers 81 countries between 1970 and 2017, we find that bilateral investment treaties are positively associated with foreign investment in post-coup countries, and that this association is strongest in the immediate years following the coup and attenuates gradually over time. This finding potentially lends support to theorizations of bilateral investment treaties as substitutes, rather than complements, to domestic institutions in fostering investment activities.

Chinese Perspectives on the Rule of Law in International Economic Law

Abstract In the currently volatile global economic environment, China’s perspectives on the rule of law in international economic law are of significance. In principle, China shares developing countries’ attitudes towards international economic law. China also seeks to play a constructive role in the development of international economic law, endorsing a flexible and pragmatic approach. China has concluded international trade and investment treaties designed to constrain its policy space and is an active supporter of the World Trade Organization’s dispute settlement and investor-state dispute settlement mechanisms, with a good record of compliance. Recent trade tensions demonstrate challenges for the international rule of law but also emphasise the role of law in overcoming political challenges.

Addressing Climate Change through International Investment Agreements: Obstacles and Reform Options

The current international investment treaty network is not well suited to climate goals. The tension stems from the fact that “old generation” of international investment agreements were concluded before the widespread climate action and they were “climate neutral” or “climate blind”. This study explores the obstacles for international investment agreements and investment arbitration to tackle climate change issues, indicating the need for reform. Despite the fact that some states have begun to reform their international investment agreements in light of climate change, there are still many shortcomings to be addressed. The current international investment agreement regime should be reformed to incorporate climate change considerations for investment arbitration to contribute to climate change mitigation. According to the findings, updating investment treaties based on a climate-oriented model would be a viable option for states.

Contemporary Dilemmas of International Investment Law: From the Perspective of Settlement of International Investment Disputes

The current state of international investment law consists of thousands of International Investment Agreements (IIAs) and Investor-State Dispute Settlement (ISDS) mechanisms that create safeguards in international investment law and provide foreign investors with the means to mitigate the political risks they face in host countries. However, the number of effective international investment treaties is generally decreasing, and new investment treaties also exclude investor-state dispute settlement mechanisms. Based on past litigation, it is easy to see that the majority of investors who have successfully initiated litigation against host States have come from developed countries. Litigation against the host State by investors from the global South has been relatively few and far between, and has mostly been dismissed, and even when it has been successfully filed, it has not been successful. As a result, the dispute settlement mechanism is not inherently fair. It can be said that this mechanism is a symbol of protectionism in the post-colonial era, which is no longer suitable for the current time. This paper addresses these issues by providing a comprehensive analysis of the current state of development of international investment treaties and the current state of investor-state dispute settlement mechanisms.

Foreign investments in the Russian Federation during the period of sanctions: restrictions imposed and their correlation with the rights of foreign investors

The article analyzes the problem of the correlation between the restrictive measures introduced by Russia against foreign investors, as a response to sanctions from unfriendly foreign states, and the guarantees for foreign investors, provided for by treaties for the promotion and reciprocal protection of investments. After that many foreign investors stopped or suspended their activities in Russia. To protect the national interests of Russia and ensure the stability of its economy, restrictive measures have been introduced against foreign investors: a ban to transfer assets from Russia abroad, a special procedure to carry out transactions with foreign persons from unfriendly states. A bill on external administration has been passed. According to foreign experts, such measures can be understood as violation of international investment treaties, and may affect companies, whose investments in Russia can be expropriated without compensation, the investors may get protection under these treaties. Russia introduced the above restrictions in response to the sanctions of unfriendly countries against our country and the departure of foreign investors, in order to maintain stability in the economic sphere, in order to ensure the security of the state. The author concludes that such restrictions based on the doctrine of reasonable state regulation are legitimate, since the state is forced to protect the national economy.

The Ways to Overcome Sanction Pressure: from External Management to Payment of Compensation under the Rules of International Treaties

Sanctions which were imposed by unfriendly nations on the Russian state, legal entities and individuals are unilateral coercive measures which have no basis in international law. They are indiscriminate since they apply to large groups of individuals and legal entities on the basis of their nationality. They are aimed at infringing on the sovereign rights of the Russian state and changing its policy. For compensation of losses which Russian companies have suffered abroad the latter should be provided with the opportunity to demand that the assets of foreign companies from the relevant unfriendly jurisdictions should be transferred to the external management of the Russian companies. Russian investors are also entitled to seek protection under international investment treaties due to the fact that the expropriation of their property was carried out without legal grounds and without payment of prompt, effective and adequate compensation. The legal reality which exists in relations with unfriendly countries demonstrates the crisis of traditional dispute resolution mechanisms and the necessity for establishing new effective international instruments.

Facilitating Access to Investor-State Dispute Settlement for Small and Medium-Sized Enterprises: Tracing the Path Forward

The costs of accessing investor-state dispute settlement (ISDS) are notoriously high. International investment treaties and investment dispute settlement in particular have been primarily designed with large investors in mind – those with the means to access an international tribunal –, while small and medium-sized enterprises (SMEs) and individual or vulnerable investors can face significant barriers to accessing ISDS. This article is the first in legal scholarship to identify and evaluate the diverse opportunities that exist for the establishment and operation of mechanisms allowing SMEs better and easier access to ISDS. Drawing on the wealth of comparative experience from the functioning of existing dispute settlement assistance mechanisms in international courts and tribunals, the article argues that legal assistance is a more efficient and cost-effective tool than financial assistance and presents concrete proposals for the funding and operation of such a mechanism for SMEs. Finally, the article examines the political cost involved in facilitating SMEs’ access to ISDS, in light of the fact that some states have been increasingly wary of ISDS, but it weighs this challengeagainst the imperative of ensuring effective access to justice. Small and medium-sized enterprises (SMEs), investor-state dispute settlement (ISDS), United Nations Commission on International Trade Law (UNCITRAL), access to justice, international investment agreements (IIAs), advisory centre on international investment law, procedural costs, legal assistance funds, expedited proceedings, UNCItRAL Working Group III

Arbitrating Investment Disputes in Time of Geopolitical Unrest: Focus on Investment Protection in Russia

Russia’s illegal full-scale invasion of Ukraine in February 2022 and the resulting war have had profound humanitarian and economic consequences affecting the lives of people in Ukraine and the region’s economic stability. The international community imposed unprecedented economic sanctions on Russian entities and individuals to condemn Russia’s actions in Ukraine. As expected, Russia retaliated and issued a series of counter-measures targeting foreign investors within Russia and occupied territories in Ukraine. Such measures will give, and have already given rise to claims by foreign investors in Russia for breaches of international investment law. This article analyses the restrictive measures targeting foreign investment imposed by Russia in response to international sanctions. It further discusses their legal implications for foreign investors. An overview of investment protections afforded under international investment treaties and international conventions as potential sources of redress for foreign investors follows in section 3. The final section highlights the challenges of pursuing investment treaty claims against Russia in the current geopolitical context (section 4). investment treaty arbitration, sanctions, counter-sanctions, investment protection in Russia, Ukraine, foreign investors, expropriation, fair and equitable treatment, narrowly worded arbitration clause, nationalization

International investment treaty: problems of theory and practice

International investment treaty: problems of theory and practice

Treaty influencers: a computational analysis of the development of international investment law

ABSTRACT This article uses computational methods to analyse the development of the international investment law regime, seeking to understand how, when, and by whom change in treaty language occurs. The study uses a novel computational method to explore the influence of different states on the language of international investment treaties and the spread of language patterns. The analysis reveals a hegemony of Western European, rather than North American influence, and further highlights a clear early mover advantage for obtaining language spread. The article discusses the implications of these findings for the investment treaty system, particularly the limited impact of hard negotiating power compared to early entrance and convincing legal language.

Jurisdictional overlap between domestic courts and investment arbitration: an occasion for judicial dialogue

Abstract Since investors can commonly bring claims under both an international investment treaty and contracts, domestic courts and investment treaty tribunals may compete for jurisdiction over what is—in essence—the same dispute. While much has been written about the distinction between treaty and contract as well as its application in practice, relatively little attention has been paid to the extent of judicial dialogue between domestic courts and investment arbitration regarding this jurisdictional overlap. Investment treaty tribunals have arguably circumvented the issue altogether and show remarkably little restraint when faced with a conflicting contractual forum-selection clause. This current conceptual position presents several issues, however, which domestic courts may encourage arbitral tribunals to overcome. Finding an occasion for more judicial dialogue should therefore not be perceived as an undue encroachment of domestic courts on the autonomous nature of arbitration, but rather as an incentive for investment treaty tribunals to scrutinize the limits of their own jurisdiction more carefully and to start regulating the issue of jurisdictional overlap differently.

Analysis of international investment treaties in the absence of international law based on data mining classification model

Abstract In today’s international relations, there are not only economic and political games but also rule games. To strengthen the protection of domestic investors and attract foreign investment, many countries attach more importance to the negotiation and conclusion of international investment treaties. The negotiation of international investment treaties is greatly influenced by the subjects of international law, national policies and international relations. As one of the sources of international law, international investment treaties are also branded with the characteristics of limited rationality of international law, behavioral international law reveals the existence of limited rationality, it can play a guiding role in the drafting and development of international investment treaties. When negotiating international investment treaties, China should guard against its weaknesses, avoid being blinded by limited rationality, conclude rules of international law consistent with historical conditions, and maximize the effectiveness of international investment treaties.

Blockades and international investment treaties

Abstract Blockades are sometimes an effective means for a State to disrupt the trade and commerce of an adversary State, and public international law has developed specific legal principles regarding blockades. The article examines the treatment of blockades under international law, and the scope for affected investors to bring investment treaty claims arising from international blockades.

Regulating Artificial Intelligence in International Investment Law

Abstract The interaction between artificial intelligence (AI) and international investment treaties is an uncharted territory of international law. Concerns over the national security, safety, and privacy implications of AI are spurring regulators into action around the world. States have imposed restrictions on data transfer, utilised automated decision-making, mandated algorithmic transparency, and limited market access. This article explores the interaction between AI regulation and standards of investment protection. It is argued that the current framework provides an unpredictable legal environment in which to adjudicate the contested norms and ethics of AI. Treaties should be recalibrated to reinforce their anti-protectionist origins, embed human-centric AI principles, and embrace expert witnesses and amicus briefs.

Investment policy reform as a driver of foreign direct investment: Evidence from China

AbstractA longstanding concern has been the proposition that the international investment treaty system lacks reform. Governments forgo Foreign Direct Investment (FDI) and thus forgo a driver of economic growth, employment and innovation. We assess the validity of this concern in the context of a major home and host country for global foreign direct investment, China, and the major reform of its Bilateral Investment Treaties (BITs). Besides other innovations, the so‐called ‘third‐generation’ BITs of China introduce a strong dispute resolution mechanism, which makes Chinese BITs more investor‐friendly. Our evidence suggests that more investor‐friendly BITs exert a positive impact on FDI in China. We argue that the positive impact of reforming BITs in a country like China, which offers a high degree of stability of the legal and political system and a strong culture of informal dispute resolution, points towards the relevance of the enforceability of property rights for investments.

CRITICAL ANALYSIS OF REFLEXIVE LOSS CLAIMS IN INTERNATIONAL INVESTMENT DISPUTES

In contemporary times corporations are aggressively making international investments in diverse economic activities. Private corporations seek protection for their investments under international investment treaties. They raise claims under international investment treaties for recovery of compensations for the losses resulting from the actions of the host state regulatory agencies. The right to claim compensation should ideally be available and exercised only by investor corporations. But in certain cases, the shareholders of the investor corporation have also raised claims, for the recovery of losses incurred by the reduction in the share prices. Such claims by shareholders are called reflexive loss claims. In this paper, the authors have adopted the normative doctrinal research method, for examining the enforceability of reflexive losses claims by the shareholders of the investor corporation under an international investment treaty. Most of the matured jurisdictions practice the rule of "no reflexive losses claim" as a matter of policy in their investment law disputes. Accordingly, there is a sense of legal uncertainty internationally regarding the enforceability of reflexive losses claims under international investment treaty. Further the authors in this paper have also tested the feasibility of private ordering solutions to reflexive claims issues. To carry out the analysis, the authors have framed the following research questions – "R.Q. 1" - Whether Reflexive losses claims by the shareholders against the actions of the host state are enforceable under investor-state investment disputes? “R.Q. 2" – Is the private ordering solution feasible for preventing the shareholder from raising the Reflexive losses claims? The authors have used graphical and diagrammatic presentations for explaining the technical aspects of reflexive loss claims. The analysis has revealed that the enforceability of reflexive losses claims is under a dilemma and a sense of uncertainty prevails regarding it. Further the solution of private ordering is legally valid option to overcome reflexive losses claims. But it has chilling effect on the other treaty provisions relating to investment protection.

What Place Does an Umbrella Clause Have in the New Generation of Bilateral Investment Treaties?

In the new wave of international investment treaties, investor protections are under scrutiny as states seek to ‘restore’ their right to regulate. The umbrella clause is one investor protection under reconsideration. The perception, held by some, is that the umbrella clause permits an ‘unjustified intrusion’ into a state’s right to regulate within its territory. For that reason, the clause is increasingly being omitted from modern-day treaties. This article undertakes a detailed analysis of the umbrella clause and its divergent construction by investment treaty tribunals. It focuses on four particular complexities associated with the umbrella clause that have confronted tribunals to date. In conducting this analysis, the author seeks to demonstrate that, properly construed, the umbrella clause does not have far-reaching ramifications or interfere with a state’s right to regulate. It has an important place in the new wave of international investment treaties but should be carefully drafted. A suggested formulation, which has in mind the four complexities discussed, is offered up. Umbrella clause, obligations observance clause, observance of undertakings clause, international investment agreements, bilateral investment treaties, next generation of BITs, investor protections, state’s right to regulate, privity of obligation, investment treaty arbitration

THE URGENCY OF COOLING-OFF PERIOD CLAUSE IN INVESTOR-STATE DISPUTE SETTLEMENT : GOOD FAITH NEGOTIATION

With the development of foreign direct investors, international investment treaties also becoming more popular, causing more cases are occurring from said treaties. To deal with disputes, international investment treaties have dispute settlement mechanisms. Investor-State dispute settlement mechanisms in international investment treaties often include cooling-off clauses. In each case, the arbitral tribunal made different decisions regarding the compliance of this clause, provoking much controversy. Often, the cooling-off period is waived by the claimant since there is no clear motive regarding the urgency. The aim of this article is to determine the urgency of the cooling-off period clauses in bilateral investment treaties as a precondition for arbitration.
 The method for research used in this study is descriptive analysis. The authors also use primary legal material, such as international arbitration, bilateral investment treaties, and arbitration rules. In addition, the authors use secondary legal sources such as related literature and journals.
 Based on the findings of this study, the existence of a cooling-off period clause plays a role in enabling parties to discuss their disputes in good faith before submitting them to international arbitration.

Domestic Investment Laws, International Economic Law, and Economic Development

Abstract‘Development’ is a legal concept which has been central to the practice of international economic law (IEL). This Article examines how ‘development’ continues to be at the heart of struggles between domestic investment laws (DILs) and international economic law. By examining over 3000 international investment agreements (IIAs) and DILs signed in the last seven decades, this Article identifies the ways in which the concept of development has evolved in tandem with the growth of international economic law by dividing the history of international investment law into six main phases. It traces the emergence of ‘development’ in DIL to the decolonization era arguing that post 1990, the proliferation of international investment treaties and growth of investment treaty arbitration have been used as tools of liberalization on the weak premise that this would lead to economic development. In this context, this Article examines closely the interpretation of ‘investment’ by ICSID tribunals, promotion of international arbitration for economic development, attempts to internationalize economic development contracts, continued relevance of the New International Economic Order, and shift to sustainable development in IEL discourse.

Survival Clause under the International Investment Treaty Reform: Challenge and Response

Survival Clause under the International Investment Treaty Reform: Challenge and Response