The large volume of literature and commentary on resolution of investor-state disputes tends to focus primarily on the rights of the foreign investor and the process through which the investor may protect her interest through investor-state arbitration, either at the World Bank's ICSID or in some other forum. Where issues relating to governments-as-respondents have been addressed, the emphasis has often been on nations such as the three NAFTA Parties and other relatively large and affluent nations such as Argentina. Until relatively recently, much less attention has been paid to challenges facing small developing respondents, such as the member nations of CAFTA-DR, Chile, Colombia or Ecuador. How, for example, should such governments respond to and manage claims, some of which in magnitude may represent a significant portion of the annual budget of the respondent government, when there is relatively limited in-house legal expertise and experience in such dispute resolution? Fortunately, UNCTAD and others have begun to take such challenges into account and to provide training for respondent government officials. Still, further actions are needed, including educating policy makers and the public as to the risks that arise in the investor-state dispute context and how best to address them. Changes in BITs and FTA investment provisions are also warranted. This article identifies the nature of the challenges presented to such governments and suggests practical means of dealing with them more effectively. It addresses, inter alia, coordination issues for the national administering authority; means of identifying and resolving such disputes before they reach the arbitration stage; effective use of outside legal advisers at various stages of the process; factors relating to the selection of arbitrators; administration of the arbitral process; and making current and future bilateral investment treaties more responsive to the procedural needs of respondent government. The article also draws on the history of a number of nations with experience in responding to and/or litigating investor state disputes.
- Investor-state disputes
- Law and Development
ASJC Scopus subject areas
- Economics, Econometrics and Finance (miscellaneous)