Balancing Investor-State Dispute Settlement (ISDS) Mechanisms And Human Rights: Ethical Dilemmas And Pathways To Harmonization
- IJLLR Journal
- Jan 18
- 2 min read
Utkarsh Shukla, Rajiv Gandhi National University of Law, Patiala, Punjab
ABSTRACT
The article analyzes the complex relationship between Investor-State Dispute Settlement mechanisms and the protection of human rights in the context of evaluating ethical tensions and practical challenges in finding harmony among competing interests within the international investment law framework. In this process, this paper, through doctrinal analysis and a case study on landmark ISDS decisions such as Philip Morris v. Uruguay and Vattenfall v. Germany, tries to illuminate the very practical implications arising from investor-state disputes on human rights. Based on a qualitative analysis of decisions by the tribunal, policy documents, and academic literature, the report will outline main challenges with possible reforms. The research indicates three major ways in which ISDS mechanisms impede human rights protection: (1) regulatory chill, whereby states are deterred from implementing human rights policies for fear of ISDS claims; (2) crippling mega-awards that strain state resources for public services; and (3) inadequate representation of affected third parties in ISDS proceedings. Analysis of recent cases reveals that although ISDS tribunals increasingly recognize public interest considerations, systemic reforms are needed to better protect human rights. This article offers a new framework for understanding the intersection of ISDS and human rights by synthesizing recent developments in both fields and proposing concrete reforms. It contributes to the extant literature by providing an informed assessment of the benefits of ISDS but also critically questioning its impact on human rights protection. The paper advances some proposals for reform that focus on the appeal mechanism, raising transparency standards, and incorporating the obligation of human rights into the procedure of ISDS. It provides some suggestions for policy and practice, offering concrete actions towards improvement of the ISDS regime.
Keywords: Investor-State Dispute Settlement (ISDS), Human Rights, International Investment Law.
