The Regionalisation of Laws and Policy on Foreign Investment
Domestic judicial systems can be biased against foreign interests, and national courts may be more likely to fall under pressures from other branches of government. The ability of foreign investors to bring their disputes to independent arbitrators provides an extra guarantee that domestic authorities will live up to their international obligations, ensuring a favourable and stable investment climate in the host country. One of the key features of investment protection is allowing foreign investors to challenge host governments’ actions before an international arbitral court. Nearly all BITs and most modern PTAs with investment disciplines provide for Investor-State dispute settlement procedures. Foreign investors are granted the choice of the forum. They may choose to bring the dispute to the domestic courts of the host country, or resolve the matter through international arbitration. In order to avoid multiple proceedings on the same matter, however, ‘fork in the road’ clauses establish that once a dispute has been brought to one forum – or, in some cases, a decision has been reached – the dispute may not be pursued in another venue.
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