- Foreign Direct Investment — Investment ‘in accordance with host state law’ — Investor — Full protection and security
This introductory chapter provides an overview of investor-state arbitration. The modern law for protection and promotion of foreign investment is codified in a vast network of bilateral and multilateral investment treaties. Under these treaties, foreign entities from a signatory state that have made a qualifying investment in the territory of another signatory state enjoy a range of protections. When an investor feels that its rights under the treaty have been violated, it can directly sue the host state of investment before an international arbitral tribunal. The chapter then explains the importance of foreign investment for capital importers; the protection of investment as a fundamental condition for attracting foreign investment; investment treaties and Investor-State dispute settlement (ISDS) as a key tool in providing such protection; the global backlash against the ISDS; and initiatives to reform the ISDS system.
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