International law on foreign investment

Previous edition classed in the now obsolete K3830.4

"1 Introduction Few areas of international law excite as much controversy as the law relating to foreign investment. A spate of arbitration awards resulting from investment treaties has added much to the debates in recent times. These have been followed by massive literature analysing the law resulting from the treaties and the arbitration awards. Since the awards often conflict, the confusion has been exacerbated. Though the conflict in the awards is often attributed to the inconsistencies in the language in the treaties each tribunal had to interpret, the more probable explanation is that there are philosophical, economic and political attitudes that underlie the conflict which in turn reflect the underlying causes for the controversies that have existed in the area for a long time. The legitimacy of the system has been contested. The result of this lack of legitimacy has been for some states to withdraw altogether from the system and for other states to bring about newer types of treaties that provide a balance between investment protection and the state's right to regulate in the public interest. Public protests against the system appeared when decisions of states involving public interests came to be decided by investment arbitration tribunals sitting far away from the states and in a manner that was seen as biased towards foreign investment"--