International Investment Law and the Rule of Law

published in Jeffrey Lowell, J. Christopher Thomas and Jan van Zyl Smit (eds.), Rule of Law Symposium 2014: The Importance of the Rule of Law in Promoting Development (Singapore: Academy Publishing, 2015) 81-102

Amsterdam Law School Research Paper No. 2017-18

Amsterdam Center for International Law No. 2017-15

20 Pages Posted: 13 Mar 2017

Date Written: 2014

Abstract

The growth of investment treaties and investment treaty arbitration has led, within a short space of time, to a lively debate about the benefits, justification, and problems of this special regime for foreign investors. Criticism of international investment law and investment treaty arbitration has focused inter alia on the field’s tensions with the concept of the rule of law. This paper, by contrast, lays out the positive case for understanding international investment law as an instrument for the furtherance of the rule of law. It addresses how the very existence of treaties that provide for special protection to foreign investors can be squared with the concept of the rule of law and the idea of “equality before the law” inherent in it. Second, it shows to which extent the substantive standards of investment treaties reflect the content of the rule of law. Third, it discusses how access to investor-state arbitration can be seen as part of the rule of law. Despite these positive linkages between investment law and the rule of law, certain shortcomings have to be acknowledged, such as inconsistencies in arbitral decision-making, assymmetries in the protection and access to justice they offer, and certain limitations to policy space. In these respects, the concept of the rule of law should serve as a guidepost for reorienting investment law and investment arbitration.

Keywords: international investment law, investment treaty arbitration, rule of law, standards of treatment, development, fair and equitable treatment, judicial review

JEL Classification: K33

Suggested Citation

Schill, Stephan W., International Investment Law and the Rule of Law (2014). published in Jeffrey Lowell, J. Christopher Thomas and Jan van Zyl Smit (eds.), Rule of Law Symposium 2014: The Importance of the Rule of Law in Promoting Development (Singapore: Academy Publishing, 2015) 81-102; Amsterdam Law School Research Paper No. 2017-18; Amsterdam Center for International Law No. 2017-15. Available at SSRN: https://ssrn.com/abstract=2932153

Stephan W. Schill (Contact Author)

University of Amsterdam ( email )

Spui 21
Amsterdam, 1018 WB
Netherlands

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