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Abstract:
The paper advances the paradoxical thesis that international investment law is developing towards a multilateral system of investment protection on the basis of bilateral treaties. Despite the infinite fragmentation of substantive investment law, coupled with arbitration as a decentralized dispute and compliance mechanism, one can observe convergence rather than divergence in this field of international law. Unlike genuinely bilateral treaties, BITs do not stand isolated in governing the relation between two States; they rather develop multiple overlaps and structural interconnections that create a relatively uniform and treaty-overarching legal framework for international investments based on uniform principles with little room for insular deviation. The paper therefore argues that BITs in their entirety function largely and increasingly analogously to a truly multilateral system. Elements of this thesis are the inclusion of most-favored-nation clauses, the possibilities of treaty-shopping through corporate structuring and the contribution of investor-State dispute settlement through the intensive use of precedent and other genuinely multilateral approaches to treaty interpretation.

International Investment Law, Multilateralization, Multilateral, Multilateral System of Investment Protection, Bilateral Treaties, BITs, Most-Favored Nations Clauses, Treaty-Shopping, Investor-State Dispute Settlement

Abstract:
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-à-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.