INVESTOR–STATE ARBITRATION AND THE ‘NEXT GENERATION’ OF INVESTMENT TREATIES

INVESTOR–STATE ARBITRATION AND THE ‘NEXT GENERATION’ OF INVESTMENT TREATIES

INTRODUCTION

Investor–state arbitration has grown over the years to become one of the most dynamic and controversial features of international investment law. Across the world, most states have entered into at least one International Investment Agreement (IIA) to promote and protect investments within their territories. From its days of humble beginnings, when the first Bilateral Investment Treaty (BIT) was executed between West Germany and Pakistan in 1959, to the present day, which is characterised by a multi-layered and multifaceted IIA regime featuring more than 3,300 known IIAs, investor–state arbitration has come a long way.

The chapter analyses the current framework regulating investor–state arbitration. It begins with a consideration of the areas of key stakeholders' concerns with the ISDS regime by highlighting select ISDS decisions around topical areas in need of reform. Next, the chapter undertakes an overview of select BIT programmes. Thereafter, we highlight recent reform measures aimed enhancing confidence in the stability of the investment environment - from procedural matters such as exhaustion of local dispute resolution framework as a prerequisite to investor–state arbitration to substantive matters such as the host state's rights to legislate freely around FET requirements, etc. The chapter concludes with policy recommendations for policymakers in future IIAs.