Investor-State Dispute Settlement: Conflict, Convergence, and Future Directions

Abstract

This article reflects upon the criticisms directed towards investor-state arbitration over the last decade. It considers the controversies, the responses and the current debates surrounding investor-state arbitration. In particular, it reviews the discourse on the right to regulate and the arguments that investment disputes can impact on matters of public interest and have the potential to encroach into host state regulatory space. It also considers concerns expressed at the structural, institutional, and procedural frameworks for investor-state arbitration. In examining both the procedural and substantive responses to such criticisms, the argument is put forward that, increasingly, there is an acknowledgement of the problematic nature of the ‘older-style’ bilateral investment treaties, that attempts are being made to address this through new emphases in treaty-drafting, and that a more nuanced approach to investment disputes may be emerging. Concerns remain, however, that even despite these developments, public welfare regulation continues to be at risk from investor challenges and that a lack of appreciation of non-investment issues persists in arbitral decision-making. For this reason, the article ultimately adopts an ambivalent view of the future impact of the changes currently occurring within the field.