The Impact of Investment Arbitration on Investment Treaty Design: Myths versus Reality

Investor-state arbitration (ISA) has become the defining feature of international investment law. ISA dominates public discussions and policy debates that accompany the negotiation of new investment agreements; it forms the lens through which investment law is analyzed and taught at universities; and it has grown to be a significant area of practice for lawyers, arbitrators, and legal service providers. Given its prominence, it is high time to ask just how influential ISA has been in shaping the rules that make up international investment law

Squaring bilateralism with multilateralism: What investment law reformers can learn from the international tax regime

The 2018 OECD Multilateral Instrument updates thousands of bilateral taxation treaties in substance and procedure. This sweeping reform of the tax regime offers valuable lessons to investment law reformers on how to square bilateralism with multilateralism, align older agreements with current best practices, and impose minimum standards while preserving flexibility

Amicable Settlements of WTO Disputes: Bilateral Solutions in a Multilateral System

Every third dispute brought to the WTO and not withdrawn early is settled amicably through a mutually agreed solution (MAS). This includes high-profile and long-standing WTO disputes such as EC-Bananas or Softwood Lumber. By offering a negotiated solution to hard cases, MAS have added stability to the multilateral trading system. MAS, however, also raise concerns. Settlements favour the instant resolution of disputes, but may conflict with third party interests and collective stakes. Where WTO members use their MAS to contract out of WTO law (‘WTO+'/‘WTO-'MAS), the multilateral trading system may be at risk. In addition, new forms of bilateral (interim-)settlements not foreseen in the DSU have recently emerged which currently escape multilateral disciplines. This article assesses how well the DSU balances the competing interests involved in amicable settlements, preserving the contractual flexibility of disputants while safeguarding multilateral interests. Contributing to current DSU reform debates, the article rejects the need for greater MAS enforceability, endorses the strengthening of procedural and substantive safeguards protecting collective stakeholders in settlements, and calls for new DSU disciplines on interim-settlement

Why omitting general public policy exceptions from investment treaties is a setback for the right to regulate

Responding to a recent Perspective on "The new Canadian Model investment treaty," this article explores the reasons why the omission of general public policy exceptions in investment treaties is a setback for the right to regulate

遗漏投资协定中的一般公共政策免责条款为何会损害监管权利

This Perspective explores the implications for the home countries of large MNEs of the agreement reached by over 140 countries in 2021 to enact a corporate minimum tax of 15%. It argues that the corporate minimum tax complements the trend to reduce the negative impact of unfettered globalization on labor, and it protects the ability of home countries to finance a robust social safety net. Home countries should adopt the corporate minimum tax, and that includes the US, which last year failed to adapt its Global Intangible Low-Taxed Income approach to the corporate minimum tax

The Impact of Investment Arbitration on Investment Treaty Design: Myth versus Reality

Investor-state arbitration (ISA) has shaped the practice, scholarship and teaching of international investment law, but to what extent has it shaped its substance? According to anecdotal evidence, states change their investment treaties in response to developments in investment arbitration. To separate myth from reality this article empirically investigates the effect of investment arbitration on treaty making through three impact channels: (1) investment clauses, (2) investment claims and (3) investment case law coding close to 1700 international investment agreements (IIA) across 55 clauses. Our analysis sheds new light on several normative debates within the field. First, we find that the omission or inclusion of investment clauses has no material effect on other treaty design elements. This suggests that ISA clauses are procedural add-ons, which bestow investors with enforcement rights, but do not alter the inter-state nature of the treaties’ substantive obligations. Second, contrary to prior anecdotal and empirical evidence, investment claims do not lead to systematic treaty design changes. Most innovation attributed to investment claims actually pre-dates them. Moreover, only in few countries did investment claims trigger treaty design changes. Hence, rather than worrying about overzealous responses by states to “rebalance” IIAs in the face of investment claims, we should be concerned about the field’s path-dependency and its entrenchment in a pre-arbitration architecture. Third, investment case law exerts the strongest impact on treaty making as controversial interpretive outcomes in investment arbitration trigger traceable changes in treaty design. Hence, states are more active in fine-tuning existing commitments than in designing new ones further entrenching IIAs’ path dependency and lack of innovation

The Impact of Investment Arbitration on Investment Treaty Design: Myth versus Reality

Investor-state arbitration (ISA) has shaped the practice, scholarship and teaching of international investment law, but to what extent has it shaped its substance? According to anecdotal evidence, states change their investment treaties in response to developments in investment arbitration. To separate myth from reality this article empirically investigates the effect of investment arbitration on treaty making through three impact channels: (1) investment clauses, (2) investment claims and (3) investment case law coding close to 1700 international investment agreements (IIA) across 55 clauses. Our analysis sheds new light on several normative debates within the field. First, we find that the omission or inclusion of investment clauses has no material effect on other treaty design elements. This suggests that ISA clauses are procedural add-ons, which bestow investors with enforcement rights, but do not alter the inter-state nature of the treaties’ substantive obligations. Second, contrary to prior anecdotal and empirical evidence, investment claims do not lead to systematic treaty design changes. Most innovation attributed to investment claims actually pre-dates them. Moreover, only in few countries did investment claims trigger treaty design changes. Hence, rather than worrying about overzealous responses by states to “rebalance” IIAs in the face of investment claims, we should be concerned about the field’s path-dependency and its entrenchment in a pre-arbitration architecture. Third, investment case law exerts the strongest impact on treaty making as controversial interpretive outcomes in investment arbitration trigger traceable changes in treaty design. Hence, states are more active in fine-tuning existing commitments than in designing new ones further entrenching IIAs’ path dependency and lack of innovation

将多边主义与双边主义相结合： 投资法改革者可以从国际税收制度中学到什么

The 2018 OECD Multilateral Instrument updates thousands of bilateral taxation treaties in substance and procedure. This sweeping reform of the tax regime offers valuable lessons to investment law reformers on how to square bilateralism with multilateralism, align older agreements with current best practices, and impose minimum standards while preserving flexibility

Champions of protection? A Text-as-data analysis of the bilateral investment treaties of GCC countries

Through the lens of state-of-the-art text-as-data techniques, this article examines the bilateral investment treaty (BIT) practice of the member states of the Gulf Cooperation Council (GCC). The analysis unveils two critical trends. First, GCC states are global champions of investment protection. In terms of protective features, their agreements are at par with the United States or Canada. In contrast to the latter, however, GCC states typically do not accompany their protective commitments with flexibility carve-outs. This has major implications for their investment policy. While GCC investors abroad enjoy unrivaled protection, the GCC states are also more exposed to investment claims than any other region. Second, notwithstanding similarities in their investment policy and partial convergence in treaty design, GCC states have yet to cultivate a uniform practice when it comes to investment treaty-making to speak with one voice in future negotiations with the European Union or the United States

The OECD Multilateral Tax Instrument: A Model for Reforming The International Investment Regime?

The international tax and investment regimes display striking similarities. They are both based on thousands of bilateral treaties that follow similar principles but differ in fine print. They each facilitate the free flow of international capital by respectively disciplining fiscal and regulatory host state conduct. Finally, they share common historical foundations and have experienced similar periods of rapid diffusion and deep contestation. Yet, while the international tax regime recently accomplished a sweeping reform to solve a decades-old legitimacy crisis, the investment regime is still grappling with its own legitimacy crisis and reform. In 2018, the multilateral tax instrument (MLI) entered into force updating thousands of bilateral taxation treaties to curb tax avoidance and prevent treaty abuse. The MLI preserves the existing bilateral tax governance structure while adding new multilateral elements, efficiently modernizes outdated bilateral agreements in both substance and procedure, and sets binding minimum standards while giving states the flexibility to contract out of and around its other provisions. This article argues that the multilateral tax instrument, specifically its (1) legal mechanics, (2) scope, and (3) design, provides a creative template of how to square bilateralism with multilateralism and can thus serve as inspiration for current efforts to reform the international investment regime