National Interest vs. Foreign Investment— Protecting Parties through ISDS

Abstract

Dispute resolution between foreign investors and their various host states is in a state of
turmoil with recent negotiation between the United States and the European Union of the
Transatlantic Trade Investment and Partnership. The current arbitration system has a variety of
problems that the European Union wishes to resolve through its proposal of an investment court
system. The current system provides a channel for investors to influence the states’ right to
regulate and circumvent domestic courts. The investment court system is an interesting alternative,
but has some drawbacks as well. An alternative must be found that provides the proper balance
between investor protection and independence of the host state to regulate. Public debate has
provided a few alternatives that attempt to strike the proper balance. The advantages and
disadvantages of the investment court proposal and the alternatives to seeking the appropriate
system in resolving investor-state disputes are discussed below.