CSD213 | Investor – State Dispute Settlement

Economies across the world have, over the last hundred years, experimented with policies based on different economic philosophies. However, it has become clear that it is next to impossible for economies to flourish without the involvement of capital inflows in the form of foreign investments. The realization that economic development of a country goes hand-in-hand with the encouragement of foreign investment has also led to nations all over the world competing to attract foreign investors. Consequently, when determining the ‘investment friendliness’ of a country, the focus has centred upon the extent of protections offered – both substantive and procedural. This explains the vigour with which thousands of investment treaties – both bilateral and multilateral – have entered into force in the last few decades.

As has been the case in recent times with many kinds of commercial disputes, arbitration has become the most popular mechanism for settlement of investment treaty- related disputes, too. However, unlike in the case of purely commercial arbitration, tribuna of ensuring that foreign investors are provided the maximum possible protection while also ensuring that sovereign rights of States party to the dispute are not overly curtailed in the quest to ensure invest or protection.

It is in this background that this course is offered to students. The course, which largely focuses on investment treaty arbitration, will enable students to understand the dynamics at play when commercial interests must be balanced with the need to regulate these commercial matters in the interests of the people of the country in which the investment is located. From a practical standpoint, the course is important for students who, especially, would want to engage in dispute resolution in the future – the increasing interest in and need for an understanding of the investment treaty law regime is undeniable, with the increased participation of India and its investors in the regime, in different capacities. The course draws upon ICSID as well as non-ICSID jurisprudence to illustrate concepts and effectuate discussions. Even though substantive principles form primary discussion in this course, the impact of procedural protections offered to foreign investors are also considered.

In addition to the above, the course also seeks to encourage students to consider contemporary issues with the investment treaty arbitration regime as a whole. More specifically, students will be given the opportunity to reflect, throughout the course but also specifically by way of a module, on the shortcomings of the extant regime for the settlement of investor-state disputes and to consider alternatives to arbitration.