Investor-State Dispute Settlement Mechanism: The Quest for a Workable Roadmap

• Author: Sachet Singh, Sooraj Sharma
• Position: Students of BA LLB (Hons) at NALSAR University of Law in Hyderabad, India and Gujarat National Law University in Gandhinagar, India, respectively
• Pages: 88-101

Investor-State Dispute Settlement Mechanism: e Quest for a

Workable Roadmap

Sachet Singh and Sooraj Sharma

Merkourios 2013 – Volume 29/Issue 76, Article, pp. 88-101.

URN:NBN:NL:UI:10-1-112865

ISSN: 0927-460X

URL: www.merkourios.org

Publisher: Igitur Publishing

Copyright: this work has been licensed by the Creative Commons Attribution License (3.0)

Keywords

International Investment Arbitration, diplomatic protection, Bilateral Investment Treaty, ICSID, denunciation, NAFTA,

AUSFTA, appellate mechanism

Abstract

e last decade has witnessed an unprecedented increase in the use of investor-State arbitration, highlighting numerous

shortcomings of the existing investor-State dispute settlement system. e legitimacy of the International Investment regime

has been under severe criticism due to the growing discontent amongst the investors as well as the host States. e increased

litigation has led to both the process and the outcome being questioned and has undermined the growth of harmonious

relationships between foreign investors and host States. e object of this paper is to explore a workable roadmap for the

investor-State dispute settlement mechanism by tracing the evolution of the existing system and by analysing the dispute

settlement mechanism in major international investment agreements. Furthermore, it highlights the causes and the possible

consequences of the denunciation of Bilateral Investment Treaties (‘BITs’) and the International Centre for Settlement of

Investment Disputes (‘ICSID’) by host nations, which have been plagued by a myriad of investment suits. e authors

suggest the need for doing away with highly protective investor-State dispute settlement mechanisms (‘ISDSMs’) in future

investment agreements and recommend the need for designing an appellate mechanism for bringing consistency and

predictability to the system.

Author Aliations

Sachet Singh and Sooraj Sharma are students of BA LLB (Hons) at NALSAR University of Law in Hyderabad, India and

Gujarat National Law University in Gandhinagar, India, respectively. ey can be reached at sachet.s.singh@gmail.com and

sooraj.sharma97@gmail.com. e authors would like to thank Professor James R Crawford for his valuable comments on an

earlier draft of this article.

Article

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Merkourios - International and European Law: General Issue 2013 - Vol. 29/76