Dispute Settlement Systems of International Investment Law: Analyses of the Systems and Reform Proposals

The current reform initiatives related to Investor-State Dispute Settlement (ISDS) emerged because of growing criticisms and dissatisfaction.There are criticisms over its fairness, transparency, and impact on State sovereignty.Under the current dispute settlement system, foreign investors are permitted to bypass domestic courts.They can bring claims to the international investment arbitration against host States.However, this system has faced backlash and criticisms.To understand the criticisms of current ISDS system and the ongoing reform initiatives, this thesis offers a critical examination of international investment law (IIL) and ISDS.It analyzes historical evolution, current debates, lessons from the World Trade Organization (WTO)'s dispute settlement system, and reform positions on dispute settlement and UNCITRAL WGIII's drafts.Moreover, to evaluate historical evolution, the thesis employs Third World Approaches to International Law (TWAIL) to highlight persistent structural inequalities that favors capital-exporting States and their investors.This approach also highlights that international investment law (IIL)'s important principles or standards were deeply influenced by European and United States' imperial practices.Moreover, reason for the creation of investment protection was to secure the interests of foreign investors from economically and politically dominant States.Host States, specifically the Latin American States, disagreed and resisted many principles and standards which many European and American scholars wrongly claimed as customary international law.These factors underscore that IIL often prioritize investor rights over regulatory and policy autonomy of host States, particularly developing and least developed countries.The thesis thus argue that understanding IIL's evolution is essential to offer any meaningful reform proposal.To trace IIL's evolution, the thesis evaluates the shift from diplomatic protection mechanism to BIT regime.This has provided a better-equipped mechanism for investor protection.However, its development is connected to the aspirations and practices of the capital exporting States of the previous era.Diplomatic protection was mostly advocated by capital exporting States.This has laid the groundwork for unorthodox investor protection which continues till today.The incorporation of investor-State dispute settlement has institutionalized investor rights to an unprecedented level which sometimes comes in the shadow of structural asymmetries. 8Sornarajah, "Resistance to Dominance," 2151.9 "International Investment Agreements Navigator," UNCTAD Investment Policy Hub, accessed November 6, 2024, https://investmentpolicy.unctad