States and Foreign Investment: A Law of the Treaties Perspective

Many States are critical of or dissatisfied with the current regime of the protection of foreign investment. They believe investment treaties often require the surrendering of important portions of their sovereignty and unacceptable limitations of their regulatory powers. The paper builds upon the following assumptions: (a) investment treaties, as any other treaties, are manifestations of the sovereignty of the contracting parties and based on their freely expressed consent; (b) as for any other treaties, States remain the exclusive and absolute domini of investment treaties; (c) once admitted within the jurisdiction of the Host State, foreign investors must respect its sovereignty and comply with its law and regulations ; (d) the host State continues to exercise its regulatory powers in accordance with its international commitments, including those contained in investment treaties.