Uniform Interpretive Methodologies in Investor-State Dispute Settlement

Investor-State-Dispute-Settlement (“ISDS”) is the most used dispute resolution mechanism for resolving high-value international investment disputes worldwide. Yet, the ISDS mechanism is currently facing a full-scale legitimacy crisis that is largely due to contradictory awards and inconsistent legal reasoning. The ISDS legitimacy crisis becomes severe in the application of vague investment standards such as the Full Protection and Security (“FPS”) due to the lack of stare decisis. For the first time, I propose the use of Uniform Interpretive Methodologies as a needed solution to resolve the ISDS legitimacy crisis of contradictory legal reasoning. In this article, I use the FPS as one of the vaguest ISDS standards to show that in the absence of the use of Uniform Interpretive Methodologies in ISDS, each Tribunal adopts a different legal reasoning that leads to a different outcome. Emphasizing the ultimate importance of Uniform Interpretive Methodologies as a novel solution is indispensable as a first step toward resolving the current worldwide legitimacy crisis in international investment law. It also forces us—attorneys and legal scholars—to develop sustainable Uniform Interpretive Methodologies in the field for a possible future of AI- based arbitrators, which may not otherwise consider factors relating to fairness and justice in assessing foreign investment protection standards.