The Multilateralization of International Investment Law: The Emergence of a Multilateral System of Investment Protection on the Basis of Bilateral Treaties
Stephan W. Schill
Max Planck Institute for International Law
June 26, 2008
Society of International Economic Law (SIEL) Inaugural Conference Paper, 2008
SIEL Online Proceedings Working Paper No. 18/08
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.
Number of Pages in PDF File: 29
Keywords: International Investment Law, Multilateralization, Multilateral, Multilateral System of Investment Protection, Bilateral Treaties, BITs, Most-Favored Nations Clauses, Treaty-Shopping, Investor-State Dispute Settlement
JEL Classification: F02, F10, F13, F14, F15
Date posted: June 26, 2008
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