Investment Treaty Breach as Internationally Proscribed Conduct: Shifting Scope, Evolving Objectives, Recalibrated Remedies?

Abstract

This paper argues that the primacy of monetary relief for investment treaty breaches must be reconsidered in light of the historic shift in the protective scope and objectives of international investment agreements. Over the past few decades international rules on the protection of foreign investment have undergone considerable change, with the notion of property replaced by a broader rubric of investment, and the protection against expropriation supplemented by the arsenal of non-expropriatory standards of treatment, including the guarantees of fair and equitable treatment, non-discrimination, and sanctity of contract. Not only are core investment protection standards liable to a broad interpretation, thus bringing a variety of host state conduct within the purview of investment treaties, but they are also mutually intersubstitutable to the extent that investors are enabled to retroactively redefine the material and jurisdictional scope of the relevant treaty instruments. The notion of internationally proscribed conduct has evolved dramatically, so it is no longer limited to outrageous and egregious incidences of state interference with foreign investment, vastly increasing the exposure of host states to the risk of having to meet claims for monetary loss The resulting widening in the scope of state responsibility before investors necessitates revisiting the validity of the grand bargain underlying the use of monetary remedies in international investment law.