Dualism In South–South Arbitration And Its Impact On ISDS Reform
- IJLLR Journal
- Jun 28
- 2 min read
Udisha Singh, JGLS
Introduction
For the longest time, international investment law was understood through the lens of this capital-exporting and capital-importing dichotomy of states. It is easy, perhaps obvious, to reduce such dichotomies to the global north-global south. However, recent trends tell a different story. UNCTAD authored, World Investment Report , 2024 found that nine economies in Asia are among the top 20 investor states (“home economies of outflows”). Both India and China have found themselves on this list. Evidently, the countries that were once capital-importing are transitioning to capital-exporting and with this transition the north-south dichotomy grows weaker. This paper seeks to answer some crucial questions born out of the contradictions of a south-south investment arbitration landscape: how do Global South states, which denounce expansive investor protections when respondents, reconcile with the fact that their own transnational corporations rely on these very protections when investing in fellow developing countries? These questions reveal a distinct contradiction, which I call the dualism of South–South arbitration. This ‘dualism’ is the focus of the paper.
The argument made herein is two-fold. Firstly, the dualism exists and is tangible: as respondents, Global South countries often advocate sovereignty-defence, systemic or even paradigmatic change like BIT terminations, restrictive model treaties, or investment facilitation agreements which oppose investor–state dispute settlement (ISDS). As home countries, however, they accept or profit from their own transnational businesses using older, liberal treaties to make claims against peer developing countries. Secondly, this dualism is important because it significantly informs ongoing debates about reforming ISDS. If the Global South countries are unable to present a consistent position to move and instead erratically swing between sovereignty-defence and pragmatic adoption, their ability to present themselves as credible advocates of systemic or paradigmatic change in multilateral processes like UNCITRAL Working Group III or ICSID amendment proceedings will be severely undermined.
