The Right to Regulate vs Investment Protection: Unveiling the Causes of Imbalance and the Limits of Current Reform Efforts in International Investment Law

Abstract This article examines the tension between the right to regulate and the principles of investment protection within the framework of the investor-State dispute settlement mechanism. The analysis employs a combination of legal doctrinal sources and case law to gain insight into the manner in which these concepts are balanced and to identify the underlying causes of the current imbalance between them. The article determines three principal causes for the observed lack of balance in the system: the failure to understand, recognise, and utilise the public interest, the lack of universal and systematic evaluative criteria, and the lack of legal certainty and predictability. It then assesses current reform efforts in international investment law to determine whether they adequately address and eliminate these causes, concluding that they do not.