Originally from World Arbitration And Mediation Review (WAMR)

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INVESTMENT TREATY ARBITRATION:

AN ASIAN PERSPECTIVE
By John Savage*

I. INTRODUCTION
Over the past five or so years, international arbitration involving states
has received a new lease of life. Previously, states were involved from time
to time in traditional international arbitrations against private parties arising
out of contracts containing ordinary arbitration clauses. States were also
involved in isolated arbitrations against other states.1 While these sorts of
arbitrations have not disappeared, they have been eclipsed by the recent,
spectacular growth of a new form of arbitration which necessarily involves a
state as one of the disputing parties: investment treaty arbitration. In this
chapter, we examine the phenomenon of investment treaty arbitration, with
an emphasis on its use in Asia.
Investment treaty arbitration is sometimes referred to as “investor-state
arbitration”, although the latter appellation does not convey the fundamental
basis of the arbitration in question, which is an investment treaty as opposed
to a contract. Investment treaty arbitration takes place between foreign
investors and the states that host their investments (“host states”). The
arbitration is commenced pursuant to the terms of an investment treaty
between the host state and the state of which the investor is a citizen or
company (the “home state”). While a foreign investor and a host state may
agree to refer disputes arising out of a contract between them to traditional
international arbitration or the courts, foreign investors – a group which
includes just about any natural or juridical person from outside the host state
which is doing business in the host state – increasingly favour investment