Backlash and State Strategies in International Investment Law
T. Gammeltoft-Hansen and T. Aalberts (eds.), The Changing Practices of International Law: Sovereignty, Law and Politics in a Globalising World, Cambridge University Press, 2017, Forthcoming
29 Pages Posted: 17 Dec 2015 Last revised: 31 May 2017
Date Written: May 30, 2017
The development of the modern investment treaty regime represents a remarkable extension of international law in the post-war period. However, the development of this regime has precipitated a backlash from some states, various civil society actors, and scholars over the past decade. For all intents and purposes, it appears that the central (underlying) reason for the backlash is one right: the procedural right granted to foreign investors allowing them to bring claims directly against the state hosting their investment. Many of these investment treaty arbitrations (ITAs) have resulted in sizable compensation awards for actions that many states believe are both legitimate and within their exclusive purview as sovereigns. This tension between the rights afforded to private foreign investors under international treaties and the legitimate rights of sovereign states to regulate in the public interest of their domestic citizenry has culminated in efforts by states to weaken the regime. This chapter examines the strategies and tactics that states are employing to scale back the unintended consequences of the international investment regime while simultaneously claiming adherence to its international legal obligations.
Keywords: Legitimacy, Investment Treaty Arbitration, International Investment Regime
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