Balancing Investor Rights and Sustainable Development in International Investment Arbitration

Abstract

International investment has increasingly become a focal point of controversies and debates, particularly when intersecting with sustainable development issues. These tensions are most pronounced within the context of international investment arbitration, where the unique characteristics of the international investment law regime come into sharp focus. The regime's dispute resolution mechanism, the types of measures that are often challenged in tribunals, and the substantial monetary compensations sought by investors—and frequently awarded by tribunals—bring sustainable development concerns to the forefront of legal and political discourse. As sustainable development has emerged as a key component of major global initiatives, political agendas, and social movements, the intersection of these issues with international investment disputes has attracted significant international attention. The growing prominence of sustainable development in international policy has led to heightened scrutiny of how investment arbitration addresses—or fails to address—these critical concerns. This paper aims to shed light on the controversies surrounding some of the most notable international investment arbitration cases that involve sustainable development issues. By examining these cases, the paper seeks to illustrate how the tension between investor rights and sustainable development objectives plays out in international tribunals. The analysis highlights the complex dynamics at play, where the pursuit of economic interests by investors often clashes with the broader goals of environmental protection, social equity, and long-term sustainability. The paper underscores the need for a more balanced approach in international investment law that can better accommodate the imperatives of sustainable development. It calls for reforms that would allow for a more equitable consideration of environmental and social factors in investment arbitration, ensuring that the pursuit of economic growth does not come at the expense of the planet and future generations.