Investment Arbitration and Domestic Screening of Foreign Investments in the Technological Sector

Foreign investments are no longer considered as instruments which inevitably enhance the technological development of the host State. Indeed, in the present context of geopolitical confrontation and renewed economic statecraft, there is a widespread belief that host States must “ screen ” foreign investments in order to prevent them from harming their security interests, as well as to ensure that domestic technologies are safeguarded. This manuscript investigates the general structure of foreign investment screening mechanisms, and analyses how screening powers are concretely performed in the technological domain, highlighting that most investigations are conducted by the domestic authorities “ below the surface ”. After defining both the scope of protection granted by investment treaties and the extent of possible treaty exceptions that could be invoked by host States to justify their screening powers, this article supports the view that, in reviewing the activities of domestic screening mechanisms, investment arbitration has the potential to go beyond the mere settlement of disputes, and to assume a “ public ” relevance, which can ultimately promote an orderly and fruitful flow of foreign investments in the technological domain. However, this presupposes that a fair balance is identified between what constitutes confidential information of the host State vel non, and that arbitral proceedings ensure a relatively high level of transparency.