Challenges Facing Investment Disputes: Reconsidering Dispute Resolution in International Investment Agreements

Abstract

International investment and international investment agreements have experienced a particular level of growth in the past few decades. With that growth and the granting of affirmative dispute resolution rights to foreign investors, international investment conflict has become increasingly highlighted; and one particular methodology - namely investment treaty arbitration - has become particularly visible. Reliance on this single option for resolving conflict has a unique set of systemic implications. This chapter therefore takes a more systemic look at investment treaty conflict and, in an effort to provide an appropriate historical and doctrinal framework, approaches to dispute resolution broadly. It asks for a reconsideration of Appropriate Dispute Resolution (ADR) methods for resolving investment treaty conflict and highlights the costs and benefits of particularized dispute resolution methods, including preventative, negotiated, facilitated, fact-finding, advisory and imposed ADR mechanisms. The chapter ultimately argues that, while arbitration has utility, the challenge for the future will be to move beyond investment treaty arbitration to a more holistic approach to conflict management that considers other opportunities, particularly the collaborative design of sustainable dispute resolution systems.

Keywords: International Investment Agreement, IIA, BIT, foreign investment, ADR, conflict management, conflict theory, dispute management, dispute systems design, investor-state dispute resolution, ICSID, mediation, negotiation, ombuds, fact-finding

JEL Classification: C78, F02, F13, F21, F30, H77, H87, K33, K41, K20, O1, O2, D7