The Role of Bilateral Investment Treaties in the Development of International Investment Law

Yusuf Caliskan

Law Department - Law School - Ibn Haldun University - Istanbul - Turkey

Abstract

Bilateral investment treaties (BITs) are the main sources of international investment law. Even though there are new challenges for the implication and the effectiveness of the BITs, the proliferation of BITs will continue. This paper examines the role of BITs in the recent developments of international investment law through analyzing Kuwait’s and Turkish BITs experiences in which both countries have signed nearly 90 BITs. Firstly, this study evaluates the common BITs provisions. BITs consist of substantive and procedural rules that secure foreign investment and provide “investment neutrality” and “market facilitation”. As Fatouros rightly argued that, the interaction of host state laws and international rules is the center of the legal regulations on foreign investment. Like many countries, Turkey has revamped its legal regulations on investment. For example, the new regulation o “Turkish Citizenship through investment” is one of the incentives and market facilitation for foreign investor. Secondly, this study evaluates contemporary issues that stipulated on new BITs such as indirect expropriation, environmental and human rights provisions, and investor-state dispute settlement (ISDS) issues. UNCTAD has been working on reform package for the international investment regime. Replacing “outdated” treaties is one of the reform action plan that Turkey has utilized in its recent BITs regime. In order to show the recent changes on the BITs in line with UNCTAD’s reform package, this paper will briefly explain the dispute settlement provision of BITs. Finally, the paper will explain the contribution of BITs in the development of international investment law.

Keywords

Bilateral Investment Treaties, UNCTAD, Development, Reform