III The Modern System of Investor-State Arbitration

Subject(s):

Investment ‘in accordance with host state law’ — Investor — Full protection and security

This chapter examines the modern system of investor-state arbitration. The International Centre for the Settlement of Investment Disputes (ICSID), created pursuant to Article 1 of the ICSID Convention, has come to play a central role in the new system of investor-state arbitration. The cornerstone of ICSID’s jurisdiction is the consent of host countries to resolve investment disputes with foreign investors through international arbitration administered by ICSID, an institution under the umbrella of the World Bank. Host states may provide their consent in individual investment contracts, in national domestic investment laws, or through bilateral and multilateral investment treaties. Bilateral investment treaties typically determine the scope of the application of the treaty, define which investments and investors qualify for protection, provide a number of substantive protections, and create procedures for the settlement of disputes. The chapter then considers multilateral investment treaties and free trade agreements with investment chapters as well as the role of national investment legislation.