In Defense of International Investment Law

The present article responds to the critical perspective Kate Miles offers on international investment law in her article “Investor-State Dispute Settlement: Conflict, Convergence, and Future Directions”, published in this Yearbook. While sharing several concerns Miles identifies, and supporting present reform efforts to make the system more transparent, increase possibilities of involvement for third parties, and ensure policy space, this article presents a generally positive perspective on the foundations of international investment law. It argues that the present system has to be seen as a mechanism to subject international investment relations to the international rule of law, with investor-state arbitration providing a form of access to justice to foreign investors in cases where domestic courts are not sufficiently well-placed to effectively control government action and enforce investment treaty obligations. The system, in other words, vindicates fundamental values of a just world order under law. Furthermore, the article argues that Miles paints a misleading picture of the power arbitrators exercise in the interpretation and application of investment treaties. Rather than developing the system to the detriment of public interests, arbitrators are subject to numerous mechanisms of state control; moreover, they regularly apply interpretative techniques that are respectful of public interests. Finally, the article discusses the cases Kate Miles presents as pathologies of the system and argues that they are not encroachments on governments’ policy space, but involve legitimate disputes that are appropriate for resolution in an international forum.