How to Kill a BIT and not Die Trying: Legal and Political Challenges of Denouncing or Renegotiating Bilateral Investment Treaties

Arbitral tribunals' expansive interpretation of key disciplines in international investment law in recent years has prompted a number of developing countries to implement strategies aimed at exiting the system. These range from denouncing the Convention on the Settlement of Investment Disputes between States and Nationals of Other States ("ICSID Convention") and withdrawing consent to jurisdiction by other arbitral bodies, to denouncing the Bilateral Investment Treaties (BITs) to which they are parties. The purported objective of these initiatives is to reduce the legal exposure of these countries to international claims before arbitral tribunals, either by eliminating a forum for foreign investors' claims or by cancelling their rights under the treaties. Whether any of these strategies will be successful in meeting this goal is still hard to say, as both the ICSID Convention and BITs have 'immune systems' - i.e. a set of built-in self-defense mechanisms-that render them somewhat resilient to change or termination. After assessing pros and cons of each of these three 'exit strategies', this article argues that developing States seeking to reduce the possible negative effects of international investment arbitration, would be better off by renegotiating their BITs. Renegotiation does not require the termination of the treaty, it may be implemented at any time and does not trigger the application of 'survival clauses', thus making changes to the BIT immediately applicable. The article thus concludes that, paradoxically, the most rational way for countries seeking to exit the system seems to be to stay in it.