Relationship between Investment Treaty Protections and Domestic Law Standards

With over 3000 international investment treaties in existence and governments continuing to negotiate and ratify additional bilateral and multilateral investment treaties, it is important to have a clear understanding of the implications of these investment treaties on investor protections and state liability, and the resulting balance of public and private interests that they strike.

To that end, CCSI is conducting comparative law research that (1) analyzes how investor-state arbitral tribunals have treated the issue of state liability for regulatory change that impacts foreign investors, and (2) compares those arbitration decisions with decisions on similar questions decided by courts under domestic law.

The first published analysis compares investment treaty awards with decisions by US courts (a shorter summary of the findings was also published). That research concludes that investment treaties are effectively providing foreign investors with a greater set of substantive rights than they would enjoy solely under US law, and that such an expanded set of treaty rights raises significant policy concerns.

This research was presented at a public consultation on TTIP negotiations, on May 21, 2014 (see the note and PPT). At another public consultation for the TTIP, held on October 1, 2014, CCSI presented additional research on the implications of allowing foreign companies to opt out of domestic courts and into investment treaty arbitration (see the PPT).