Positive voices in support of ISDS continue to surface – and this time it comes from highly-regarded academics.
Forty seven law professors from various universities recently sent an open letter which seeks to clarify the skewed information surrounding the discussion on ISDS and offers the salient facts on the system.
From the outset, the letter makes a strong case for the relationship between state’s sovereignty, rule of law and ISDS. States enter into investment treaties with ISDS provisions as an exercise of its sovereignty. ISDS, in turn, enforces rule of law as it ensures that states respect their international obligations in such treaties. It is as simple as that.
When it comes to a challenge of regulation to protect public interest, ISDS cases have shown that bona fide government acts have not caused a liability for States to compensate investors. It is also not correct that showing a mere loss of profit is enough for an investor to get compensated – it has to show that a State has done wrong based on the treaty terms.
ISDS is not a completely alienated or ‘private’ system – in many ways it mirrors procedural protections in national courts. Both parties have the right to retain counsel and to submit evidence. Impartial arbitrators can be challenged. The system also works closely, instead of separately, with national courts. For example, a national court may consider whether or not an ISDS award is valid.
Above all, ISDS is governed and supported by both domestic and international laws.
When one takes a careful and diligent look into the legal framework of ISDS and the outcomes of the system, it would not be surprising to come to the same conclusion as reached by these law professors.
It just takes a willingness to learn and an open mind.