Depoliticizing Sovereign Wealth Funds Through International Arbitration

Abstract

Since their inception in the 1950s, Sovereign Wealth Funds (SWFs) have dramatically expanded with the purpose of investing government revenue and maximizing returns for states with surplus funds. While SWF investments benefit their sovereign owners and can bring stability and growth to the economies the) invest in, concerns about the use of investments for political gains and about the defense of national security have led to calls for regulation of SWF investment worldwide. But rather than entangle these investments in a series of varied and complex domestic law solutions, this Comment argues that SWF investment can be effectively monitored through international arbitration. If SWFs are held accountable in international arbitration, they will increasingly behave as private investors and politically motivated investing will be more easily identified and prevented. The International Centre for Settlement of Investment Disputes (ICSID) provides just the forum for resolution of disputes regarding SWF investments. Through ICSID arbitration, international standards can be developed and enforced to protect commercially minded investing and to condemn politically motivated investing

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