This new volume is the first book in a new series from Oxford University Press on International Arbitration, edited by Professor Loukas Mistelis of Queen Mary University of London. This new series is dedicated to specific issues in international arbitration and practice, following the example of the well-known Oceana series. The aim of this first volume is to cover the main instruments under which investment disputes arise; the legal basis of treaty arbitration; dispute resolution; and parallel proceedings. In the nine chapters, a definition of a foreign investor and an investment is offered, including nationality issues and foreign control, and a full treatment of investors' substantive rights, including fair and equitable treatment. The last three chapters deal with the substantive rights of the investors, in particular their treatment, expropriation, compensation and remedies. Arbitration of overseas investment disputes is one of the fastest-growing areas of international dispute resolution. Over 2000 Bilateral Investment Treaties (BITs) were signed in the last decades between foreign States, in addition to many multilateral treaties (MITs) and other forms of investment agreements (NAFTA, ASEAN, etc). The first BIT was between former West Germany and Pakistan (1959); disputes that have arisen from that day are often resolved through the forum of international arbitration, and typically involve claims by an investor company for compensation when an investment has been illegally expropriated or adversely affected by the State's activities. This is one of the main differences between international commercial arbitration and international investment arbitration: the awards are kept private and confidential in the first case (if the two parties don't allow the publication). In the second case they are published because there is a clear public interest in knowing about the award, the dissenting opinion(s), the ruling that could be discussed or taken as a precedent. In Vivendi v Argentina (2005) for the first time the ‘particular public interest’ push the tribunal to set out three criteria for determining to admit non-disputing party submissions (perhaps in a future award some tribunal could admit also amicus curiae submissions!). In interpreting a BIT, the authors emphasize, it is necessary to remember that the substantive law applied in a treaty arbitration is the treaty itself. There are numerous issues relating to the role and application of principles of international law and of decisions by international tribunals, including those of previous investment arbitrations.

The legal principles that have developed in this area are subject to intense debate, and many scholars are involved in the process of trying to organize them. Many of the principles have only been developed recently in the context of investment treaty arbitrations, and tribunals are often guided more by the approaches taken by other tribunals than by pre-existing doctrines of public international law. However, the volume of law created, applied and analysed by tribunals is such that it is now possible to think about a process of codification. This book provides the first detailed analytical survey of the developing substantive principles of international law which are being applied to disputes by international investment tribunals. It considers the key questions that arise, and provides a description of the present state of the law as reflected in tribunal practice. The three authors, Campbell McLachlan QC, Laurence Shore and Matthew Weiniger, are leading practitioners and academics in the field, and this book cannot but strengthen their place as leading authorities.

Their focus in this book is not on the economic functions and political aspects of BITs. The outcome of investment arbitration is usually in favour of investors from the developed world and against developing countries. This may not be surprising; the BITs are entered into to facilitate foreign investment and cases are only brought when foreign investors believe they may achieve a remedy. But it is not enough to operate with this kind of assumption. A further analysis of the law and the way in which it functions is required. There are informational asymmetries, and developing countries may have entered into agreements bringing obligations they could not reasonably have foreseen. Some decisions of arbitration tribunals have developed an interpretation of standard clauses and used general principles in a way that could be seen as lacking in balance.

The book clearly demonstrates that independent, leading arbitrators in a number of cases have gone to extreme lengths to avoid decisions against the United States. If the law developed in arbitral decisions requires developing countries to give up regulatory competences and to suffer review of court decisions—all essential parts of national autonomy—so should developed countries. It is for the countries to use the treaty-making process if they wish for anything else.

Here the differences between the US 1994 Model BIT and the US 2004 Model BIT reflect an attempt to avoid that kind of restriction on US national autonomy but still tying down the developing country as effectively as possible. This brings other problems—both of these model BITs are very different from any outcome of multilateral processes, such as the GATT/WTO treaties or any other UN convention. The US model BITs could only be used by picking developing countries one by one. Then add the impact of the arbitration process, edging the balance even further in favour of the developed countries, and the outlook is rather bleak. This is not an equitable or balanced regime.

In line with the book's high technical standards, it provides two comprehensive Tables of Cases and Treaties and 12 appendices, including the UK, USA (1994 and 2004), Germany, Sri Lanka, France model BITs, as well as the ASEAN Agreement and World Bank Guidelines. In addition to the first-rate scholarly legal analytical treatise that takes up the major part of the book, these appendices provide a highly practical and unique tool for anyone involved or interested in the topic.