Carlos Bianchi is an international arbitrator and mediator in New York and an attorney in New York, Chile, England and Spain. He serves on the panel of the International Centre for Dispute Resolution and on the Commercial Panel of the American Arbitration Association. He has also acted as arbitrator in numerous arbitrations under the rules of the International Chamber of Commerce. The author acknowledges the assistance of David Zandi, J.D. candidate at the Benjamin N. Cardozo School of Law.
This article provides an overview of investor-State arbitration and examines some of the recurring issues that have led to frequent discussions in recent years, both in arbitral decisions and in law review articles.
Since at least the nineteenth century, there has been tension between the interests of foreign investors and those of the country where the investment is made—i.e., the host country. The foreign investor wishes to protect its investment from certain actions by the host country, while the host country wishes to protect itself from overreaching by the home country of the foreign investor. The “Calvo” and “Drago” doctrines were developed in reaction to perceived overreaching on behalf of foreign investors. Under these doctrines, jurisdiction in international investment disputes lies with the courts of the host country.1