The Scope of Investor-State Dispute Settlement in International Investment Agreements

International investment agreements contain a number of different investor-state dispute settlement clauses ranging from offering a very limited jurisdiction over specific compensation issues to broad options to arbitrate any (contractual or treaty based) investment dispute. Investment arbitration practice has demonstrated that uncertainty about the precise scope of dispute settlement clauses often leads to protracted jurisdictional battles. Reducing this uncertainty by drafting clearer dispute settlement clauses is likely to deter investors from bringing hopeless claims, and states from raising indefensible jurisdictional objections. A limited set of jurisdictional and procedural obstacles should allow tribunals to deal with the real (substantive) issues of investment law, ie whether and to what extent the standards of investment protection enshrined in bilateral investment treaties (BITs) and investment chapters of international investment agreements (IIAs) have been complied with or not. This would also serve the primary purpose of investment arbitration as protection of foreign investments.