International investment treaties represent an important and fast-moving area of the law and policy that is growing in significance in Australia and the Asia-Pacific region. More than 3500 investment treaty agreements now exist worldwide in the form of bilateral investment treaties and free trade agreements with investor-state arbitration provisions. Investment treaty obligations have been included in the Trans-Pacific Partnership Agreement (TPP) and form part of the draft texts being negotiated for the Transatlantic Trade and Investment Partnership (TTIP) and the Regional Comprehensive Economic Partnership (RCEP). 

Investment treaties are typically justified as providing a way for states to credibly commit to providing international rule of law protections in order to encourage foreign investment at reasonable rates of return. These treaties typically permit foreign investors to bring arbitral claims directly against states if they believe that they have been discriminated against, treated unfairly or inequitably or had their property expropriated without adequate compensation. Since the late 1990s, thousands of investor-state arbitrations have been filed and hundreds of investor-state awards have been issued. 

However, investor-state claims are often controversial. Some of these claims involve sensitive issues of public policy, such as Australia’s Tobacco Plain Packaging Act. Some states have been deluged by claims, such as Argentina, which has faced more than 50 claims since its 2001 economic crisis. Civil society has also objected to these treaties often being negotiated without public consultation and to investor-state arbitrations often being heard by private, ad hoc arbitral tribunals rather than public courts. 

States have reacted to some of these concerns by redrafting investment treaty obligations in certain ways. 

This course introduces students to the main legal principles and policy controversies surrounding the investment treaty system. It looks at a variety of questions about when arbitral tribunals will have jurisdiction, what substantive protections are given to investors (e.g., direct and indirect expropriation, fair and equitable treatment and national treatment), and what defences are available to states (e.g., necessity). It examines different ways of understanding the system (e.g., as a sub-field of public international law, international commercial arbitration, or public law) as well as some of the critiques that have been raised about the system (e.g., secrecy, inconsistency and actual or perceived bias by arbitrators).