ISDS is often criticised for being unbalanced and favouring the foreign investor over the State as well as domestic businesses. The inadequacy of the domestic legal regime in reasonably protecting foreign investor interests is one of the reasons put forth to canvas for the ISDS provisions in BITs as well as investment agreements.
Abdelhameed Dairy writing in the Harvard International Law Journal opines otherwise. In his piece titled "Navigating the International Investment Maze: Dissecting Imbalances, Ditching BITs, and Charting a Course Towards Sustainable Solutions", he argues that the domestic legal space is a more appropriate forum for foreign investment protection instead of the international BIT or FTA realm.
Proposing a "National Foreign Investment Law" NFIL, the author argues that the protection for foreign investment should lie in the domestic legal framework where protection, the right to regulate as well as adequate safeguards to foreign investors should be given. It also envisions a competitive environment amongst states to protect foreign investment to attract more investment. This is like the eas of doing business paradigms that many states adopt to facilitate investment.
One aspect is the credibility of domestic judicial processes and procedures in terms of efficacious remedies for violations of rights of foreign investors. How does the NFIL tackle that premise? Also, is doing away with BITs a altogether a pragmatic solution?
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