Benedict Kingsbury & Stephan W. Schill

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Investment treaty arbitration is a growing field, with more than 300 treaty-based disputes publicly known and many new arbitrations being initiated each year. At the same time, the cases related to the Argentine economic emergency, and the stance taken by several other Latin American governments, highlight concerns about the suitability and indeed the legitimacy of the existing system for dealing with certain situations, in particular when tensions between investment protection and competing rights and interests are at issue. Even traditional capital-exporting countries, like the United States, are becoming increasingly apprehensive about the restrictions that investment treaties and investment treaty arbitration impose on their regulatory powers. The United States’ experience with Chapter 11 of NAFTA, for example, has had a direct influence on the attitudes of the United States in more recent free trade agreement and BIT negotiations, and led to modifications to the US model BIT.