Investor-State Arbitration and Human Rights

After decades of growth and popularity, the international investor-state dispute settlement (ISDS) regime has come under intense criticism recently-particularly concerning the perceived chilling effect the regime imposes on states\u27 ability to regulate in the public interest. This Article seeks to contextualize this criticism by examining the historical antecedent of ISDS in international law: the law of diplomatic protection. It proceeds to focus on the flexibility of ISDS as a critical advance over diplomatic protection, and shows how ISDS has evolved over time-particularly as developed states have moved from approaching the regime from a predominantly investment-exporting perspective to a more balanced perspective that accounts for inbound foreign investments. In concrete terms, the inherent flexibility of ISDS has permitted it increasingly to protect states\u27 interests in regulating in the public interest, while at the same time protecting foreign investment against inappropriate governmental interference. The Article ultimately argues that the ISDS system should be permitted to continue to evolve to arrive at the appropriate equilibrium for its tim