International investment law is the field of international law that governs relationships between states and foreign investors.
Unlike WTO law, the system of international investment law has no central treaty or institution. This field of law comprises more than 3200 bilateral investment treaties (BITs) and investment chapters in preferential trade agreements (collectively referred to here as investment treaties). These treaties are supplemented by an unknown number of investment contracts between governments and foreign investors, as well as domestic investment legislation.
Investment treaties aim to attract foreign investment in order to promote economic development, by providing foreign investors and their investments with certain protections, including some protections that go beyond those available to domestic investors. These may include obligations on the home state to not expropriate property, not to discriminate against the investor, and to provide ‘fair and equitable’ treatment to the investor. Investment treaties frequently permit foreign investors to directly bring legal challenges against the government of the state in which their investment is held, through a process known as investor-state dispute settlement (ISDS).
The obligations of governments under international investment law vary depending on the provisions of the relevant treaty. However, certain concepts are common to the majority of investment treaties. Investment tribunals are not required to follow decisions of prior tribunals, but in practice, tribunals often rely on the decisions of earlier tribunals, including decisions made in relation to other investment treaties.