Document Type


Publication Date



A new de facto rule has emerged in international investment law that emphasizes and prioritizes investment stability, imposing liability on host governments for a wide range of public interest measures deemed to interfere with “commitments” given to foreign investors by host governments. The arbitral decisions from which this new rule has emanated in treaty-based investment disputes resolve types of claims that have long been familiar to domestic jurisdictions. Yet, as this article uncovers through a comparative law analysis of factually similar cases decided under United States law over roughly the past 200 years, the approaches taken and pronouncements issued by the arbitral tribunals subject respondent governments to a much broader standard of liability than the more cautious and deferential stance toward legislative policy making and implementation that has been adopted and refined by US courts. In contrast to practice under US law, international tribunals’ approaches in treaty-based investor-state arbitrations largely shift the risk of regulatory change from investors to states (and taxpayers), potentially putting greater pressure on governments to refrain from taking action to refine and upgrade their laws and regulations. The findings and policy implications of this comparative law analysis raise critical questions about the principles and justifications underlying this new rule in its current form, and the legitimacy and desirability of its continued application.


Comparative and Foreign Law | Dispute Resolution and Arbitration | International Law | Law | Securities Law