The Balancing (And Unbalancing?) of Interests in International Investment Law and Arbitration

Abstract

This chapter examines the dynamic balancing, rebalancing, and (perhaps) unbalancing of interests which takes place in international investment law (IIL) and arbitration. It first analyses the contention that investment treaty negotiations establish an equilibrium between the states parties, reflecting both their interests and negotiating strengths. It then turns to the system of international investment dispute settlement through arbitration, and explores the ways in which the arbitral process might be said to rebalance or unbalance the equilibrium established between the states parties to the investment treaty. Some of the practical implications of this analysis are then explored by looking at the impact of different approaches to investment treaty interpretation on this question of interest balancing. The chapter thereby explores the validity of concerns which have been expressed that the investment arbitration system contains distorting structural biases which impair the legitimacy of its dispute settlement processes – that features of the system lead it to favour certain interests over others.

Keywords: international investment law, investment arbitration, investment treaties, dispute settlement, interest balancing