Shiwani Priya, NUSRL
INTRODUCTION
“IF YOU wanted to convince the public that international trade agreements are a way to let multinational companies get rich at the expense of ordinary people, this is what you would do: give foreign firms a special right to apply to a secretive tribunal of highly paid corporate lawyers for compensation whenever a government passes a law to, say, discourage smoking, protect the environment or prevent a nuclear catastrophe. Yet that is precisely what thousands of trade and investment treaties over the past half-century have done, through a process known as “investor-state dispute settlement”, or ISDS”.
The investor-state dispute settlement, or ISDS, process has become one of the most contentious topics in the international investment treaty framework due to the countries' current apprehension of uncertainty. The international legal system for foreign investments is a complex structure of interconnected international treaties that includes both multilateral and bilateral investment treaties (BITs or Bilateral Investment Promotion and Protection Agreements - BIPAs). The ISDS mechanism, which puts a host country before international private arbitration tribunals, is established in these accords. It provides a legal incentive in the form of investor rights, which ensure that such international investments are made in a lawful environment. Thus, we can say ISDS is a generic and umbrella concept which encapsulates investment treaty arbitration as a form of dispute resolution.
