III - Treaty negotiation and multilateralization of international investment law  pp. 65-120


By Stephan W. Schill

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The bilateral form of investment treaties suggests that the treaties differ significantly in content and structure, and rather resemble quid pro quo bargains than establish a uniform framework governing international investment relations. Although there is widespread agreement that capital-exporting as well as capital-importing States derive benefits from foreign investment through gains in cooperation based on the theory of comparative advantage, capital-exporting States should be expected to aim primarily at the protection of the interests of their nationals investing abroad and restrict the host States' regulatory leeway as far as possible, while capital-importing States should be interested in upholding their sovereignty. Depending on the relative negotiating power of the two parties negotiating a BIT, it should be expected that the different, and partly opposing, interests of States result in radically different and disparate negotiation outcomes in bilateral relations and counteract the creation of uniformity in international investment law.

Contrary to this intuitive expectation, however, international investment treaties have, to a significant extent, developed a surprisingly uniform structure, often converging in their wording and endorsing uniform principles of investment protection. Certainly, the levels of investment protection in different bilateral relationships differ: some treaties may include certain investor rights, while others may not; some treaties may offer recourse to investor-State arbitration, others may not; some treaties may contain specific exceptions to certain principles of investment protection, others may not. Notwithstanding these differences, investment treaties conform to archetypes and converge considerably with regard to the principles of investment protection that they establish.