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Chapter Eleven - Investment Arbitration

Published online by Cambridge University Press:  05 June 2012

Margaret L. Moses
Affiliation:
Loyola University, Chicago
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Summary

GROWTH OF FOREIGN INVESTMENT AND INVESTMENT ARBITRATION

Foreign investment is a critical component of the world's economy. Global flows of investment in 2010 amounted to U.S. $1.22 trillion. The United Nations Conference on Trade and Development (UNCTAD) estimates for 2011 that foreign direct investment (FDI) flows will be between $1.3 and $1.5 trillion. Although the highest capital inflows in 2010 in any single country went to the United States, significant increases were attained in Latin American and the Caribbean, as well as in South, East, and Southeast Asia. Because many developing countries do not have the capital, technology, or other resources needed to modernize their infrastructure and develop their industries, foreign investment is seen as crucial to making them more competitive in a global economy. Developed countries, as well, know the importance of attracting foreign investment. Investment to developed countries in 2010 was approximately U.S. $ 526.6 billion. It is thus not surprising that many countries have actively sought ways to encourage foreign investment.

Foreign investors considering major capital-intensive projects such as the financing and development of a power plant, the construction of a 5,000-unit housing project, the building of long-distance oil and gas pipelines, or the development of transportation or communications infrastructure want assurances that their investments will not be taken over (expropriated) by the host country or so undermined by changes in the host country's regulations or laws that the investment is constructively expropriated. They also want a way to resolve disputes that does not depend on the courts of the host country, for fear that they will not receive fair and equal treatment in those courts when the opposing party is the State or a State entity. The need for investors to feel secure in their investments has led national governments to take steps to make their laws and rules more investor friendly. Many have adopted investor protection legislation, and have entered into bilateral and multilateral investment treaties.

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Publisher: Cambridge University Press
Print publication year: 2012

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References

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Reed, LucyPaulsson, JanBlackaby, Nigel 2011
Redfern, Hunter, 2009
Coe, Jr. Jack J.Domestic Court Control of Investment Awards: Necessary Evil or Achilles Heel Within Nafta and the Proposed FTAA 19 185 2002
Cremades, Bernardo M.Cairns, David J. A.Contract and Treaty Claims and Choice of Forum in Foreign Investment DisputesDossiersParallel State and Arbitral Procedures in International Arbitration 2005Google Scholar
Umbrella clause from Swiss Model BIT 2006
Wong, Jarrod 2006
Foster, George K.Striking a Balance between Investor Protections and National Sovereignty: The Relevance of Local Remedies in Investment Treaty Arbitration 49 2011
2006

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  • Investment Arbitration
  • Margaret L. Moses, Loyola University, Chicago
  • Book: The Principles and Practice of International Commercial Arbitration
  • Online publication: 05 June 2012
  • Chapter DOI: https://doi.org/10.1017/CBO9780511920073.013
Available formats
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Send book to Dropbox

To send content items to your account, please confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about sending content to Dropbox.

  • Investment Arbitration
  • Margaret L. Moses, Loyola University, Chicago
  • Book: The Principles and Practice of International Commercial Arbitration
  • Online publication: 05 June 2012
  • Chapter DOI: https://doi.org/10.1017/CBO9780511920073.013
Available formats
×

Send book to Google Drive

To send content items to your account, please confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about sending content to Google Drive.

  • Investment Arbitration
  • Margaret L. Moses, Loyola University, Chicago
  • Book: The Principles and Practice of International Commercial Arbitration
  • Online publication: 05 June 2012
  • Chapter DOI: https://doi.org/10.1017/CBO9780511920073.013
Available formats
×