Originally from World Arbitration And Mediation Review (WAMR)

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SUMMARY: FROM "NORTH-SOUTH

DIVIDE" TO "PRIVATE-PUBLIC DEBATE":
REVIVAL OF THE CALVO DOCTRINE AND
THE CHANGING LANDSCAPE IN
INVESTMENT LAW
By Wenhua Shan∗

Wenhua Shan surveys the impact of investment arbitration on Latin
America in the article From "North-South Divide" to "Private-Public
Debate": Revival of the Calvo Doctrine and the Changing Landscape in
Investment Law. The glut of arbitration proceedings commenced pursuant
to the International Centre on the Settlement of Investment Disputes
Convention (ICSID) against Latin American States is causing Latin America
to rethink its approach to attracting foreign investment. There is evidence
that other regions of the world are also beginning to modify their investment
treaties to afford themselves more protection from investors.

In the late 19th Century, Argentine diplomat Carlos Calvo formulated a
policy view that would come to bear his name.1 The so-called "Calvo
Doctrine" was based on the twin tenets of non-intervention and parity
between foreigners and nationals.2 Widely accepted in Latin America, the
doctrine aims to keep powerful, foreign States (usually from the Northern
Hemisphere) from dominating and controlling Latin American States.3

Accordingly, many contracts between foreign investors and Latin American
States mandated that foreigners and nationals have the same rights, national
courts have exclusive jurisdiction over any disputes, and foreign investors
are precluded from seeking diplomatic protection.