In recent years the debate over investor state dispute settlement (ISDS) has heated up and in Europe is reaching boiling point. European governments were once the main force behind modern investment treaties, but now European citizens are sceptical. As a result the future of ISDS has become somewhat uncertain; reforms have been proposed, but it is not yet clear whether or not they are sufficient to appease critics. This article explores the origins of ISDS, the backlash against it, the shortcomings of the public ISDS debate, proposed reforms, and prospects for its future role in international economic law. The origins of ISDS, and its discontents Disputes between foreign investors and host states pre-date the modern investment treaty regime. Early disputes reflected a colonial era approach to foreign investment, with European or American corporations investing in the developing world, often with strong backing from their governments. When problems arose with the treatment of those investments, the governments would frequently step in to support their corporations. In some instances these governments established ad hoc tribunals or claims commissions to resolve the dispute. After World War II, as colonial arrangements came to an end and assertive, nationalist governments took hold in parts of...
Written by Simon Lester