Re-thinking International Investment Law's 'Utopia'

International investment law (IIL) is characterised by an inherent tension between investment protection and the retention of sovereign powers by the host state. Yet, despite relying on the same principle, each party will conceptualise sovereignty in a manner that solely supports its claim. Koskenniemi asserts that the dichotomous interpretation of principles sourced in international law is reflective of the manner in which public international law functions. He explains the operation of public international law by reference to 'apology' and 'utopia'. He asserts that a balance must be achieved between legal (utopian) and factual (apologetic) understandings of the principles at issue. Koskenniemi recognises that this dynamic equally applies to lex specialis regimes such as IIL. Using this framework, this paper seeks to examine the notion of sovereignty as it is currently used in IIL. It argues that the dominant understanding of sovereignty in IIL is a legal one. As a result, IIL fails to consider the role of a factual (or sociological) conception of sovereignty. As such, this paper presents an alternative view of sovereignty as a counterbalance to the prevalent legal approach. To achieve this goal, the paper relies on the principle of economic self-determination to assert that a sociological view of sovereignty is conceivable. As recent reforms in IIL support the development of a sociological view, it asserts that this approach is feasible and does not require wholesale change. Given this, the paper concludes by arguing that IIL is capable of achieving a more appropriate balance between 'apology' and 'utopia' through the use of a sociological conception of sovereignty