RECONCILING PUBLIC AND PRIVATE INTERESTS IN INVESTOR- STATE ARBITRATION

Abstract

Investor-State Arbitration (ISA) has been subjected to much criticism in recent times due to its negative impact on the legitimate public interests of host states majorly belonging to the developing world. ISA has structural limitations. Issues infact emerge at the stage of negotiating Bilateral Investment Treaty itself, where the ‘capital-exporting’ developed state are able to extract maximum protection for their investment and on the other hand the ‘capital importing’ developing states undertake many obligations which at times have proved to be detrimental for their interests. The importance of foreign investment to meet developmental goals cannot be downplayed, however this should not come at the cost of local interests. The authors in this paper have traced the historical-economic developments post World War II that has shaped the current International Investment Regime. The challenges that ISA poses to public interests concerning environment, health, labour rights have also been discussed. The authors have worked upon suggestions to reconcile public and private interests in ISA.