Five Justifications for Investment Treaties: A Critical Discussion

Abstract:     
The article examines five justifications for the investment treaty system. These include the justifications: (1) that investment treaties are a means to encourage foreign direct investment; (2) that investment treaties respond to the bias and unreliability of domestic courts; (3) that investment treaty arbitration advances the rule of law in the resolution of investor-state disputes; (4) that investment treaties affirm the sovereignty and bargaining strategies of states; and (5) that investment treaties were endorsed by the democratic processes of states. The discussion concludes with recommendations that states exercise greater care when considering entry into the system or, more likely, the maintenance or renewal of existing treaties, and that states consider options for reform of the arbitration mechanism.

Number of Pages in PDF File: 32

Keywords: investment treaties, investment arbitration

working papers series