Law and Practice of Investment Treaties: Standards of Treatment Chapter 1, Historical Development of Investment Treaty Law
University of Victoria - Faculty of Law
Freshfields Bruckhaus Deringer
KLUWER LAW INTERNATIONAL, Chapter 1, Historical Development of Investment Treaty Law, 2009
The international legal framework governing foreign investment consists of a vast network of international investment agreements (IIAs) supplemented by the general rules of international law. Although other international treaties interact with this network in important ways, IIAs are the primary public international law instruments governing the promotion and protection of foreign investment. IIA texts differ in many important respects, but they are also remarkably similar in structure and content: most IIAs combine similar (sometimes identical) treaty-based standards of promotion and protection for foreign investment with an investor-state arbitration mechanism that allows foreign investors to enforce with a powerful and dynamic method of international treaty enforcement. The purpose of this book is to provide a comprehensive explanation of the substantive standards of treatment that states must accord to foreign investors and investment under IIAs.
The uniqueness of the current IIA network is a product of an historical evolution going as far back as the Middle Ages. Prior to the twentieth century, international standards of foreign investment and investor protection developed primarily through the related processes of diplomatic protection and claims commissions. In the late nineteenth and early twentieth centuries, as the world economy became increasingly internationalized, the limits of the diplomatic protection model became apparent, particularly as controversies arose between capital exporting and importing states regarding the customary international law minimum standard of treatment to be accorded to foreign investors and investments. n the aftermath of the Second World War (WWII), the process of international economic integration was rekindled, leading to the emergence of the contemporary investment treaty framework. It is crucial to consider this historical development in order to better understand current debates and contentious issues in investment treaty law.
This chapter is divided into five parts. Part I delves into the historical origins of international investment law. Part II then explores developments in the post- WWII period, setting the background for Part III, which discusses the origins and development of IIAs. Part IV provides an overview of the current status of the IIA network. Part V discusses the basic structure of IIAs.
Number of Pages in PDF File: 104
Keywords: international investment law, international economic law, bilateral investment treaties, foreign investment, international investment, international investment agreements, international arbitration, arbitration, investment, investment treaty, public international law
JEL Classification: F02, F21, F23, F33, F36
Date posted: April 9, 2009 ; Last revised: May 3, 2009