BILATERAL INVESTMENT TREATIES AND THE ROLE OFINTERNATIONAL ARBITRATION IN INVESTOR-STATE DISPUTES
Abstract
The first Bilateral Investment Treaty was signed on 25 November, 1959, between Pakistan and Germany, and this marked the beginning of a historical treaty, becoming a core feature of International Investment Law. The BITs were meant to facilitate investment between Foreign Investors and States, but as the number of signed BITs grew, so did the disputes. India alone had to give up 77 of the 83 signed BITs because of restrictive, informal and demanding structures. This ultimately leads to distrust between the parties. These Investor-State Disputes became one of the most difficult conflicts to settle, in both domestic and international floors. Arbitration, therefore, came a beacon to these. It became the engine of the International Investment Law, from challenging old BITs, to formally making rules demarcating roles and behaviour, Arbitration has taken on a role not even
legal authorities could take.
This paper examines how Bilateral Investment Treaties function, and subsequently lead to disputes, and how Arbitration comes in to resolving the disputes caused by BITs. It analyses how disputes hinder the investment and how the relationship between the states and foreign investors experiences damage, which only gets worse with trials and pendency, and then where does arbitration come in and how. It also focuses on why arbitration is increasingly being chosen, not just as an alternative, but as a solution to resolving the disputes. Finally, it discusses case studies and examines Arbitration, Bilateral Investment Treaties, Investor-State Disputes, and the inter-relation of the three.
Key words :- Bilateral Investment Treaty (BIT), Investor-State Dispute Settlement (ISDS), International Arbitration, Foreign Investment, International Investment Law
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