The other concern deriving
from ICS is that a state, by showing its consent to obligatory arbitration in IIA,
may have surrendered its sovereignty over matters that could potentially be
brought before an arbitration tribunal1. “By
including within its scope any act of a state taken in its sovereign capacity
with the potential to breach a standart of investment protection, this type of
arbitration is akin to judicial review
of the acts of state2”.
It is however accesible only to foreign investors to the detriment of local investors,
leading some to dencounce it as reverse discrimination3.
It is worth considering
whether ICS violates the EU’s discrimination standards, compared to foreign investors
to domestic ones and can be seen that foreign investors is different from that
of domestic investors in the EU in as much as the conditions for investment
within a Party may be less adapted to foreign investors than to domestic investors
and that, moreover, investors in a foreign market may as such face obstacles.
They may perceive a possible bias in the treatment on the part of political,
administrative or judicial authorities in the territory where they make their
investment. It is also worthy to note that foreign investors may naturally be resistant
to taking risks in investing in the other Party on account of political,
linguistic, legal, or other differences. Some authors make an argument that ICS
privileges foreign investors, keeping in mind that they are a collection of entities
and people that belong to the wealthiest in the world and they don’t need
special rights compared to others4.
1 Supra note 10, R.Dolzer & C.
Schreuer, at p.11.
2 G. Van Harten, “Investment Treaty Arbitration, Procedural
Fairness, and the Rule of Law”, in Schill (ed.), International
Investment Law and Comparative Public Law(2010). 6.
4 Gus van Harten and Pavel
Malysheuski, Who Has Benefited
Financially from Investment Treaty Arbitration? An Evaluation of the Size and
Wealth of Claimants, Osgoode Legal Studies Research Paper No. 14/2016.