The regime for international investment is extraordinary in public international law and controversial in many regions of the world. This article explores two aspects of this set of rules: its decentralization and the unusual powers it gives to private actors to invoke dispute settlement. Decentralization has contributed to a competitive environment for ratification of bilateral investment treaties (bit s) and has elevated the importance of dyadic bargaining power in the formation of the regime. Governments of developing countries are more likely to enter into bit s and tie their hands more tightly when they are in a weak bargaining position, which in turn is associated with economic downturns of the domestic economy. Once committed, investors have sued governments with surprising regularity, arguably contributing disproportionately to legal awards that favor the private corporate actors who have the power to convene the dispute settlement system. States have begun to push back, revising their obligations and attempting to annul arbitral awards. One of the conclusions is that it is important not only to consider whether bit s attract capital—which has been the focus of nearly all the empirical research on bit effects—but also to investigate the governance consequences of the international investment regime generally.

https://www.cambridge.org/core/services/aop-cambridge-core/content/view/S0043887113000312

Bargaining over BITs, Arbitrating Awards: The Regime for Protection and Promotion of International Investment

States entering into investment treaties establish dual roles for themselves as
treaty parties (with an interest in interpretation) and actual or potential respondents
in investor-state disputes (with an interest in avoiding liability). By viewing
states primarily as respondents rather than also as treaty parties, investment tribunals
often ignore the relevance and persuasiveness for interpretation of those
parties� subsequent agreements and practice. The approach proposed here seeks
to recalibrate interpretive power between states and tribunals by increasing consideration
of such evidence.

Power and Persuasion in Investment Treaty Interpretation: The Dual Role of States

Using the international investment regime as its point of departure, the article applies notions of bounded rationality to the study of economic diplomacy. Through a multimethod approach, it shows that developing countries often ignored the risks of bilateral investment treaties (bits) until they themselves became subject to an investment treaty claim. Thus the behavior of developing country governments with regard to the international investment regime is consistent with that routinely observed for individuals in experiments and field studies: they tend to ignore high-impact, low-probability risks if they cannot bring specific “vivid” instances to mind.

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When the Claim Hits: Bilateral Investment Treaties and Bounded Rational Learning

Introduction Part I. Historical Evolution of Foreign Investment Protection Law: 1. Origins of international investment law 2. 'The dynamic of a politically oriented law': foreign investment protection in a changing political environment Part II. Contemporary Interaction: Foreign Investment, Imperialism and Environmental Protection: 3. Polarisation of positions 4. Hints at synergy Part III. Foreign Investment Law, Practices and Policy: Future Trends: 5. Transformation in international law: applying developments to foreign investment 6. Paths towards a reconceptualised international law on foreign investment 7. Conclusion: patterns of power in international investment law.

The Origins of International Investment Law: Empire, Environment and the Safeguarding of Capital

Investment treaties are some of the most controversial but least understood instruments of global economic governance. Public interest in international investment arbitration is growing and some developed and developing countries are beginning to revisit their investment treaty policies. The Political Economy of the Investment Treaty Regime synthesises and advances the growing literature on this subject by integrating legal, economic, and political perspectives. Based on an analysis of the substantive and procedural rights conferred by investment treaties, it asks four basic questions. What are the costs and benefits of investment treaties for investors, states, and other stakeholders? Why did developed and developing countries sign the treaties? Why should private arbitrators be allowed to review public regulations passed by states? And what is the relationship between the investment treaty regime and the broader regime complex that governs international investment? Through a concise, but comprehensive, analysis, this book fills in some of the many "blind spots" of academics from different disciplines, and is the first port of call for lawyers, investors, policy-makers, and stakeholders trying to make sense of these critical instruments governing investor-state relations.

The Political Economy of the Investment Treaty Regime

The present article examines the function of the revised identity clause in Article 4(2) TEU. By focusing on the fundamental political and constitutional structures of Member States, Article 4(2) TEU provides a perspective to overcome the idea of absolute primacy of EU law and the underlying assumption of a hierarchical model to understand the relationship between EU law and domestic constitutional law. The revised identity clause in Article 4(2) TEU not only demands respect for national constitutional identity, a notion determined through a close interplay of domestic constitutional law and EU law, but can be understood as permitting domestic constitutional courts to invoke, under certain limited circumstances, constitutional limits to the primacy of EU law. At the same time, Article 4(2) TEU, in tandem with the principle of sincere cooperation contained in Article 4(3) TEU, embeds these constitutional limits into an institutional and procedural framework in which domestic constitutional courts and the Court of Justice interact closely as part of a composite system of constitutional adjudication

Overcoming absolute primacy: Respect for national identity under the Lisbon Treaty

1. Introduction: globalization and international investment law 2. The dynamics of multilateralism and bilateralism in international investment relations 3. Treaty negotiation and multilateralization of international investment law 4. Multilateralization through most-favoured-nation treatment 5. Multilateralization and corporate structuring 6. Multilateral enforcement of international investment law 7. Multilateralization through interpretation: producing and reproducing coherence in investment jurisprudence 8. Conclusion: multilateralization-universalization-constitutionalization.

The Multilateralization of International Investment Law

Investor-State arbitration is not only a mechanism to settle disputes between an investor and a State arising out of an investment, it is also a form of global governance that involves the exercise of power by arbitral tribunals in the global administrative space. In setting standards for State conduct vis-a-vis foreign investors, for example in defining what is improper administration or a violation of due process under fair and equitable treatment, tribunals set standards which may influence future conduct by the respondent State and other States, and will very likely influence the decision-making of tribunals in other cases. In settling disputes between investors and States, the tribunals also act as pre-agreed review agencies of a State’s specific actions, in some cases applying proportionality analysis or other tools of public law review when confronted with difficult balances between investor protection and the State’s environmental or economic policy choices in the wider public interest. In these respects, investor-State arbitration forms part of a governance structure, and helps constitute and shape the emerging body of global administrative law. At the same time, this regulatory activity of arbitral tribunals attracts significant criticism, not only of specific decisions but with regard to the legitimacy of the decision-making powers of these tribunals as such. This paper argues that these concerns can be addressed, at least in part, by application of principles of the emerging global administrative law to, and by, these tribunals.

https://papers.ssrn.com/sol3/Delivery.cfm/SSRN_ID1466980_code419245.pdf?abstractid=1466980&mirid=1

Investor-State Arbitration as Governance: Fair and Equitable Treatment, Proportionality and the Emerging Global Administrative Law

I. THE "LEGITIMACY CRISIS" IN INTERNATIONAL INVESTMENT LAW International courts and tribunals are, in contrast to their domestic counterparts, in the unique situation of having to defend themselves on a regular basis against attacks on their legitimacy as mechanisms for resolving disputes about the scope and the limits of state sovereignty. By "legitimacy" we mean acceptance of "a rule or rule-making institution which itself exerts a pull toward compliance on those addressed normatively because those addressed believe that the rule or institution has come into being and operates in accordance with generally accepted principles of right process."1 Such legitimacy concerns affect not only dispute-settlement institutions as a whole, but also inform the selfunderstanding and the work of those who decide disputes on the international level-in other words, international judges and arbitrators. This holds true for any of the many international dispute-settlement bodies that have come into existence over the past two decades or so.2 It holds particularly true in what appears to be the fastest growing area of international law at this time: international investment law. Without a compte rendu of their function and impact on society, those deciding investment disputes not only will have difficulty responding to legitimacy-related criticisms-they also will have trouble understanding their own position and the responsibility it entails. Defenses of the legitimacy of international investment law and investment dispute resolution have not, however, kept pace with the enormous development of this field of international law and the accompanying critical attention it has received. Indeed, investment treaties have proliferated to an unprecedented degree, having surged from less than 400 in 1989 to well over 2,500 bilateral, regional, and sectoral treaties today.3 Equally, the volume of investor-state arbitrations under these treaties has risen just within the last decade to well over two hundred, with new arbitrations being initiated on an almost daily basis.4 This rise of international investment law and its dispute setdement mechanisms does not, however, take place in a void. It is a consequence of equally unprecedented increases in transborder investment flows, a necessary concomitant of the increasing globalization that has taken place since the end of the Cold War.5 It is this change in the world's social and economic environment that has created the need for legal institutions that structure and stabilize foreign investment activities and help to regulate conflicts that unavoidably arise out of increases in investment cooperation. Equally unavoidably, the rise of investment treaties and investment-treaty arbitration has attracted critical attention from the users of the disputesettlement mechanism (that is, investors and host states) as well as various interest groups that claim to represent "civil society" and the "public interest." Although these critical voices vary in the specific points they raise and in the tone in which they raise them, they have contributed to a considerable amount of literature intimating that investment law may be in a veritable "legitimacy crisis."6 On the one hand, this crisis is caused by the vagueness and indeterminacy of the standard investor rights, leading to problematic predictability in the application of investment treaties.7 On the other hand, it originates from procedural aspects of investment treaty arbitration, specifically problems relating to the overlap between different arbitral institutions and control mechanisms8 and the resulting inconsistencies in the decisions of different arbitral tribunals.9 While some of these problems, in particular unpredictability and incoherence in investor-state dispute settlement, are considerable and in need of serious attention, arguably a solution will come with the passage of time. Increasing dispute-setdement procedures and doctrinal efforts promise to prove that concepts relating to investors' rights, such as fair and equitable treatment and indirect expropriation, are not as vague and indeterminate as some argue. …

/pdf/is-arbitration-a-threat-or-a-boon-to-the-legitimacy-of-i8k6qz0jhr.pdf

Is Arbitration a Threat or a Boon to the Legitimacy of International Investment Law

PART I - CONCEPTS AND FOUNDATIONS PART II - INVESTOR RIGHTS IN COMPARATIVE PERSPECTIVE PART III - COMPARATIVE ADMINISTRATIVE AND COMPARATIVE CONSTITUTIONAL LAW ON SELECTED ISSUES PART IV - DISPUTE SETTLEMENT, ARBITRAL PROCEDURE, AND REMEDIES

Stephan W. Schill

Papers

Overcoming absolute primacy: Respect for national identity under the Lisbon Treaty

The Multilateralization of International Investment Law

Investor-State Arbitration as Governance: Fair and Equitable Treatment, Proportionality and the Emerging Global Administrative Law

Is Arbitration a Threat or a Boon to the Legitimacy of International Investment Law

International Investment Law and Comparative Public Law