4 A History of International Investment Treaties

Subject(s):

Definition of investment — Investor — BITs (Bilateral Investment Treaties) — Treaties, interpretation — World War I to World War II — Specialized treaty frameworks — Regional trade — Most-favoured-nation treatment (MFN)

Since the inception of international investment, foreign investors have sought assurances from the sovereigns in whose territory they invest that their interests will be protected from negative actions by the sovereign and local individuals. This chapter begins with a historical background of the treatification process, which came about due to the perceived weaknesses of customary international law applying to foreign investments. It then discusses the objectives of the movement to negotiate investment treaties; the primary and secondary objectives of investment treaties; long-term goals of investment treaties; the treaty negotiation process; and the consequences of investment treaties, including the growth in investor–state arbitration cases to settle investment disputes.